【文章內容簡介】 ns to Shareholders v. Return on Book Equity (Conclusion) ? Thus, we see that there is no correspondence between a firm39。s ROE in any year amp。 the total rate of return earned by shareholders on their investment in the pany’s stock Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 23 Analysis using Financial Ratios ? Despite the differences in accounting and financial principles, the published accounts of a firm yield clues about its financial condition ? Five aspects of a firms performance: ? Profitability ? Asset turnover ? Financial leverage ? Liquidity ? Market value Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 24 Profitability ? ?? ?%2/ 1 33 0 0s E q u i t yr39。S t o ck H o l d eN e t I n c o m e (R o E )E q u i t y o n R e t u rn %2/7 2 06 0 060a l A s s e t sA v er a g e T o tE B I T (R o A ) A s s et so n R e t u rn %302 0 060S a l e sE B I T (R o S ) S a l e so n R e t u rn ???????????Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 25 Asset Turnover ? ?? ?? ?T i m e s 2/7 2 06 0 02 0 0A s s e t s T o t al A v e r a g eS al e s T u r n o v e r A s s e t T i m e s 2/1 8 01 5 01 1 0I n v e n t o r y A v e r a g eS o l d G o o d s ofC o s t T u r n o v e r I n v e n t o r y T i m e s 2/60502 0 0sR e c e i v a b l e A v e r a g eS al e s T u r n o v e r sR e c e i v a b l e????????????Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 26 Financial Leverage T im e s 2160E x p e n s eI n te r e s t E B I T E a r n t I n te r e s t T im e s%577 2 0 0 6A s s e ts T o ta lD e b t T o ta l D e b t ??????Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 27 Liquidity T i m e s 180sL i ab i l i t i eCu r r e n t sRe c e i v abl eCas h E ar n t I n t e r e s t T i m e sT i m e s 360sL i ab i l i t i eCu r r e n t A s s e t sCu r r e n t Cu r r e n t ???????Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 28 Market Value S h a r ep e r V a l u eB o o k S h a r ep e r P r i c e B o o k Ma r k e t t oS h a r ep e r E a r n i n g sS h a r eP e r P r i c e E a r n i n g s t oP r i c e??????Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 29 Ratio Comparisons ? Establish Your Perspective ? Shareholder ? Employee, Management, or Union ? Creditor ? Predator, Customer, Supplier, Competitor, Trade Association ? Benchmarks ? Other panies ratios ? The firm’s historical ratios ? Data extracted from financial markets ? Sources ? Dun amp。 Bradstreet, Robert Morris, Commerce Department39。s Quarterly Financial Report, Trade Associations Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 30 Relationships Amongst Ratios ? It is sometimes valuable to depose ratios into sums, differences, products and quotients of other ratios. Many such schemes start with: Tur n ov e rA s s e t * s a l e son R e t u rn *???As s e t sSa l e sSa l e sEB I TAs s e t sEB I TRoACopyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 31 Ratio Analysis Limitations ? Ratio analysis indicates where you might profitably focus your attention, but it can also mislead you – Look for collaborating evidence for the hypotheses you form from the ratios ? Sound longterm goals of a firm may cause ratios to look awful. Managementbyratios may not be in the firms longterm interest ? Companies in the same industry may have very different distribution channels, and accounting methods, leading to markedly different ratios that are nonetheless appropriate to each pany Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 32 Comment: ? Always keep in mind that financial statements are prepared according to accounting standards and traditions, and that they do not fully satisfy the needs of a financial analysts ? They do yield useful information if used with care and understanding Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 33 Effect of Financial Leverage ? Financial leverage simply means the use of borrowed money – Shareholders of a firm use financial leverage to boost their ROE ? This increases the sensitivity of ROE to fluctuations in the firm’s underlying profitability as measured by its ROA Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 34 Illustration ? (Table amp。 of textbook) – Consider two firms that are identical except that Nodebt is financed using $1,000,000 of equity and Halfdebt is financed using $500,000 of equity and $500,000 of debt – further assume that the EBIT of both firms is $120,000 and tax is 40% Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 35 Case: Borrow at 10% N o d e b t H a l f d e b tE B I T 1 2 0 , 0 0 0 1 2 0 , 0 0 0I n t e r e s t 0 5 0 , 0 0 0T a x a b l e I n c o m e 1 2 0 , 0 0 0 7 0 , 0 0 0T a x 4 8 , 0 0 0 2 8 , 0 0 0N e t I n c o m e 7 2 , 0 0 0 4 2 , 0 0 0E q u i t y 1 , 0 0 0 , 0 0 0 5 0 0 , 0 0 0R O E 7 . 2 0 % 8 . 4 0 %Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall 36 Case: Borrow at 15% N o d e b t H a l f d e b tE B I T 1 2 0 , 0 0 0 1 2 0 , 0 0 0I n t e r e s t 0 7 5 , 0 0 0T a x a b l e I n c o m e 1 2 0 , 0 0 0 4 5 , 0 0 0T a x 4 8 , 0 0 0 1 8 , 0 0 0N e t I n c o m e 7 2 , 0 0 0 2 7 , 0 0 0E q u i t y 1 , 0 0 0 , 0 0 0 5 0 0 , 0 0 0R O E 7 . 2 0 % 5 . 4 0 %Copyright 169。 2021 Pearson Education, Inc. Publishing as Prentice Hall