会计专业英语教程Financial Statements Analysis文档格式.docx
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教学学时
2课时
教学内容与教学过程设计
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FinancialStatementsAnalysis
〖理论知识〗
Topic1:
BasicAnalyticalProcedures
1.MeaningofFinancialStatementAnalysis
Financialstatementanalysisisdefinedastheprocessofidentifyingfinancialstrengthsandweaknessesofthefirmbyproperlyestablishingrelationshipbetweentheitemsofthebalancesheetandtheincomestatement.Itistheprocessofreviewingandanalyzingacompany'
sfinancialstatementstomakebettereconomicdecisions.
2.ObjectivesofFinancialStatementAnalysis
Theprimarypurposeoffinancialstatementanalysisistoevaluatetherisks,performance,financialhealth,andfutureprospectsofanorganization.
3.UsersofFinancialStatementAnalysis
(1)Creditors
Anyonewhohaslentfundstoacompanyisinterestedinitsabilitytopaybackthedebt,andsowillfocusonvariouscashflowmeasures.
(2)Investors
Bothcurrentandprospectiveinvestorsexaminefinancialstatementstolearnaboutacompany'
sabilitytocontinueissuingdividends,ortogeneratecashflow,ortocontinuegrowingatitshistoricalrate.
(3)Management
Thecompanycontrollerpreparesanongoinganalysisofthecompany'
sfinancialresults,particularlyinrelationtoanumberofoperationalmetricsthatarenotseenbyoutsideentities.
(4)Regulatoryauthorities
Ifacompanyispubliclyheld,itsfinancialstatementsareexaminedbytheSecuritiesandExchangeCommission(SEC);
forexample,ifthecompanyfilesintheUnitedStatesthentoseeifitsstatementsconformtothevariousaccountingstandardsandtherulesoftheSEC.
4.ToolsofAnalysis
(1)TrendAnalysis:
Trendanalysisisthecomparisonoffinancialstatementinformationoveraseriesofreportingperiods.
(2)CommonSizeAnalysis:
CommonSizeanalysisisthereviewoftheproportionofaccountstoeachotherwithinasingleperiod.Common-sizebalancesheetsandincomestatementsareusedtocomparetheperformanceofdifferentcompaniesoracompany'
sprogressovertime.
(3)Ratioanalysis:
Financialratiosaremathematicalcomparisonsoffinancialstatementaccountsorcategories.Theserelationshipsbetweenthefinancialstatementaccountshelptheusersofaccountinginformationtounderstandhowwellabusinessisperformingandofareasneedingimprovement.FinancialRatiosareusedastoolstohelpussqueezeasmuchinformationaspossiblefromthefinancialstatements.Itmustbekeptinmind;
however,thatafinancialratioisonlyonenumberdividedbyanotherandonlyyieldsanumberandittakesonmeaningwhencomparedwithotherfirmsorindustryaverage.
Topic2:
RatioComputationsandInterpretations
Ratiosweredevelopedtostandardizeacompany'
sresults.Theyallowanalyststoquicklylookthroughacompany'
sfinancialstatementsandidentifytrendsandanomalies.Ratioscanbeclassifiedintermsoftheinformationtheyprovidetothereader.Thereareseveralgeneralcategoriesofratios,eachdesignedtoexamineadifferentaspectofacompany'
sperformance.Forexample,VinHuaisconsideringaninvestmentinoneofthetwofastfoodrestaurantchainsbecausehebelievesthetrendtowardeatingoutmoreoftenwillcontinue.HischoiceshavenarrowedtoFastSandwichandGiantPizza,whosebalancesheetsandincomestatementsfollow:
BalanceSheet
(inthousands)
Assets
FastSandwich
GiantPizza
Cash
$2,000
$4,500
AccountsReceivables(net)
2000
6500
Inventory
5000
Property,PlantandEquipment(net)
20000
35000
OtherAssets
4000
TotalAssets
30000
$56,000
LiabilitiesandShareholders’Equity
Accountspayable
$2,500
$3,000
NotePayable
1500
BondsPayable
10000
CommonStock($1parvalue)
1000
3000
Paid-in-capitalinExcessofParValue,common
9000
RetainedEarnings
6000
7000
TotalLiabilitiesandShareholders’Equity
$30,000
Marketpricepershare
$30
$20
IncomeStatements
(inthousands,exceptpershare)
NetSales
$53,000
$86,000
CostofGoodsSold(restaurantopeningoperatingexpenses)
37000
61000
GrossMargin
16000
25000
Sellingexpense'
Administrativeexpenses
Interestexpenses
1400
3200
Incometaxesexpense
1800
3400
TotalOperatingExpense
14200
21600
NetIncome
EarningsPerShare
1.8
1.13
Basedontheabovecomparativebalancesheetandincomestatementsoftwocompanies,wewillexplaintheseratiosthroughoutthissection.
(1)ProfitabilityRatio:
Herearesomeofthekeyratiosthatinvestorsandcreditorsconsiderwhenjudginghowprofitableacompanyshouldbe
Ø
GrossMarginRatio
Thisshowstheaverageamountofprofitconsideringonlysalesandthecostoftheitemssold.Thistellshowmuchprofittheproductorserviceismakingwithoutoverheadconsiderations.Assuch,itindicatestheefficiencyofoperationsaswellashowproductsarepriced.Widevariationsoccurfromindustrytoindustry.Itindicatesthegrossmargingeneratedforeachdollarinnetsales.
Formula:
Grossmarginratio=Grossmargin
Netsales
Where:
Grossmargin=Netsales-Costofgoodssold
Calculation:
FastSandwich=
=30%
GiantPizza=
=29%
Interpretation:
Asyoucansee,FastSandwichhasaratioof30%,veryneartoGiantPizza,29%.Thesearehighratiointherestaurantindustry.Thismeansthatafterpaysoffhisinventorycosts,companyhasofitssalesrevenuetocoverhisoperatingcosts.
NetMarginRatio
TheNetmarginorprofitmarginratiodirectlymeasureswhatpercentageofsalesismadeupofnetincome.Inotherwords,itmeasureshowmuchprofitsareproducedatacertainlevelofsales.Thisratioalsoindirectlymeasureshowwellacompanymanagesitsexpensesrelativetoitsnetsales.Thatiswhycompaniesstrivetoachievehigherratios.Theycandothisbyeithergeneratingmorerevenueswhykeepingexpensesconstantorkeeprevenuesconstantandlowerexpenses.Likemostprofitabilityratios,thisratioisbestusedtocomparelikesizedcompaniesinthesameindustry.Thisratioisalsoeffectiveformeasuringpastperformanceofacompany.
Netmarginratio=Netincome
Netsales
=3.4%
=4.0%
Asyoucansee,FastSandwichonlyconverted3.4percentofitssalesintoprofits.Contrastthatwiththiscompany,GiantPizzahasalsoonly4%of$86,000ofnetsalesand$3400ofnetincome.Thisyearbothmayhavemadefewersalesbuttheycancutexpensesandcanbeabletoconvertmoreofthesesalesintoprofitsinfuture.
ReturnonAssets(ROA)
Thisratiomeasurestheoperatingefficacyofacompanywithoutregardstofinancialstructureandindicateshowmuchnetincomewasgeneratedfromeachdollarinaverageassetsinvested.
Returnonassets=Netincome
Averagetotalassets
Averagetotalassets=(Previouslyreportedtotalassets+currenttotalassets)
2
=6.0%
=6.1%
Asyoucansee,herealsobothcompanieshaveverysimilaramountofreturnsfromassets.
ReturnonCommonShareholders’Equity
Thisratiomeasuresthereturnaccruingtocommonshareholdersandexcludespreferredshareholders.
Returnoncommonshareholders’equity=(Netincome-preferreddividends)
Averagecommonshareholders’equity
Averagecommonequity=(previouslyreportedcommonshareholders’equity+currentcommonshareholders’equity)/2.
=11.3%
=17.9%
Asyoucansee,theprofitabilityofshareholdersinvestmentsbetweenthetwocompaniesarevarieswiththesimilaramountofinvestment.GiantPizzaperformsbetterthantheFastSandwichinthiscase.
EarningsPerShare(EPS)
Earningspershare,alsocallednetincomepershare,isamarketprospectratiothatmeasurestheamountofnetincomeearnedpershareofstockoutstanding.Higherearningspersharearealwaysbetterthanalowerratiobecausethismeansthecompanyismoreprofitableandthecompanyhasmoreprofitstodistributetoitsshareholders.Mostofthetime,earningpershareiscalculatedforyear-endfinancialstatements.Sincecompaniesoftenissuenewstockandbuybacktreasurystockthroughouttheyear,theweightedaveragecommonsharesareusedinthecalculation.Theweightedaveragecommonsharesoutstandingiscanbesimplifiedbyaddingthebeginningandendingoutstandingsharesanddividingbytwo.
Earningspershare=(Netincome-preferreddividends)
Weightedaveragenumberofsharesoutstanding
Weightedaveragenumberofsharesoutstanding=Thenumberofsharesoutstandingduringeachmonth,weightedbythenumberofmonthsthoseshareswereoutstanding.
=1.18
=1.13
Asyoucansee,FastSandwichEPSfortheyearis$1.18.Thismeansthat