Beruflich Dokumente
Kultur Dokumente
CHAPTER 3
Analysis of Financial Statements
Ratio analysis
Du Pont system
Effects of improving ratios
Limitations of ratio analysis
Qualitative factors
Copyright © 2002 Harcourt, Inc. All rights reserved.
3-2
Income Statement
2002E 2001
Sales 7,035,600 5,834,400
COGS 6,100,000 5,728,000
Other expenses 312,960 680,000
Depreciation 120,000 116,960
Tot. op. costs 6,532,960 6,524,960
EBIT 502,640 (690,560)
Interest exp. 80,000 176,000
EBT 422,640 (866,560)
Taxes (40%) 169,056 (346,624)
Net income 253,584 (519,936)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3-5
Other Data
2002E 2001
Shares out. 250,000 100,000
EPS $1.014 ($5.199)
DPS $0.220 $0.110
Stock price $12.17 $2.25
Lease pmts $40,000 $40,000
CA $2,680
CR02 = CL = $1,445 = 1.85x.
CA - Inv.
QR02 = CL
$2,680 - $1,716
= $1,445 = 0.67x.
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 10
Comments on CR and QR
Sales
Inv. turnover = Inventories
$7,036
= = 4.10x.
$1,716
Receivables
DSO = Average sales per day
Receivables $878
= Sales/360 = $7,036/360
= 44.9 days.
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 14
Appraisal of DSO
Total debt
Debt ratio =
Total assets
= $1,445 + $500 = 55.6%.
$3,497
EBIT
TIE =
Int. expense
= $502.6 = 6.3x.
$80 (More…)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 18
EBITDA
= EC
coverage
EBIT + Depr. & Amort. + Lease payments
Interest Lease Loan pmt.
expense + pmt. +
NI $253.6
PM = Sales = $7,036 = 3.6%.
BEP = EBIT
Total assets
$502.6
= $3,497 = 14.4%.
(More…)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 22
(More…)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 24
Net income
ROE = Common equity
= $253.6 = 16.3%.
$1,552
2002E 2001 2000 Ind.
ROA 7.3% -18.1% 6.0% 9.0%
ROE 16.3% -391.0% 13.3% 18.0%
Both below average but improving.
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 25
Price = $12.17.
NI $253.6
EPS = Shares out. = 250 = $1.01.
Com. equity
BVPS =
Shares out.
= $1,552 = $6.21.
250
(More…)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 30
( Profit
margin )( TA
turnover )( Equity
)
multiplier = ROE
NI Sales TA = ROE.
Sales x TA x CE
Sales $7,035,600
= = $19,543.
day 360
Q. How would reducing DSO to 32
days affect the company?
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 44
(More…)
Copyright © 2002 Harcourt, Inc. All rights reserved.
3 - 47