财务报表分析研究外文翻译.docx

财务报表分析研究外文翻译.docx

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财务报表分析研究外文翻译

财务报表分析研究外文翻译

题目双汇企业财务报表分析研究

姓名宋孟姣

专业2010级财务管理本科1班

学号201040016

指导教师董玥玥

郑州科技学院工商管理学院

二〇一四年三月

FINANCIALSTATEMENTANALYSISOFEVERAGE

ANDHOWITINFORMSABOUTPORABLIITYAND

PRICE-TO-BOOKRATIOS

1FINANCIALSTATEMENTANALYSISOFEVERAGE

Thefollowinginimicalstatementanalysisseparatestheeffectsofenhancingliabilitiesandoperatingliabilitiesontheportabilityofshareholders’equity.The

analysisyieldsexplicitleveragingequationsfromwhichthespeci,cationsforthe

empiricalanalysisaredeveloped.Shareholderportability,returnoncommonequity,ismeasuredas

Returnoncommonequity（ROCE）=comprehensivenetincome?

commonequity

（1）

Appropriateinimicalstatementanalysisdisentanglestheeffectsofleverage.Theanalysisbelow,whichelaboratesonpartsofNazismandPenman（2001）,beginsbyidentifyingcomponentsofthebalancesheetandincomestatementthatinvolveoperatingandenhancingactivities.Theportabilityduetoeachactivityisthencalculatedandtwotypesofleverageareintroducedtoexplainbothoperatingandenhancingportabilityandoverallshareholderportability.

1.1DistinguishingthePortabilityofOperationsfromthePortabilityofFinancing

Activities

Commonequity=operatingassets，financialassets,operatingliabilities,Financial

liabilities

（2）

Thedistinctionherebetweenoperatingassets（liketradereceivables,inventoryandproperty,plantandequipment）andinimicalassets（thedepositsandmarketablesecuritiesthatabsorbexcesscash）ismadeinothercontexts.However,ontheliabilityside,enhancingliabilitiesarealsodistinguishedherefromoperatingliabilities.Ratherthantreatingallliabilitiesasenhancingdebt,onlyliabilitiesthatraisecashforoperations—likebankloans,short-termcommercialpaperand

bonds—areclassierassuch.Otherliabilities—suchasaccountspayable,accrued

expenses,deferredrevenue,restructuringliabilitiesandpensionliabilities—arise

fromoperations.Thedistinctionisnotassimpleascurrentversuslong-termliabilities;pensionliabilities,forexample,areusuallylong-term,andshort-termborrowingisacurrentliability.

Rearrangingtermsinequation

（2）,Commonequity=（operatingassets,operatingliabilities）,（financialliabilities,

financialassets）OrCommonequity=netoperatingassets,netfinancingdebt

（3）

Thisequationregroupsassetsandliabilitiesintooperatingandenhancingactivities.Netoperatingassetsareoperatingassetslessoperatingliabilities.Soaarmmightinvestininventories,buttotheextenttowhichthesuppliersofthoseinventoriesgrantcredit,thenetinvestmentininventoriesisreduced.

Firmspaywages,buttotheextenttowhichthepaymentofwagesisdeferredinpensionliabilities,thenetinvestmentrequiredtorunthebusinessisreduced.Netenhancingdebtisenhancingdebt（includingpreferredstock）minusinimicalassets.So,aarmmayissuebondstoraisecashforoperationsbutmayalsobuybondswithexcesscashfromoperations.Itsnetindebtednessisitsnetpositioninbonds.Indeedaarmmaybeanetcreditor（withmoreinimicalassetsthaninimicalliabilities）ratherthananetdebtor.

Theincomestatementcanbereformulatedtodistinguishincomethatcomesfromoperatingandenhancingactivities:

Comprehensivenetincome=operatingincome,netfinancingexpense

（4）

Operatingincomeisproducedinoperationsandnetinimicalexpenseisincurredintheenhancingofoperations.Interestincomeoninimicalassetsisnettedagainstinterestexpenseoninimicalliabilities（includingpreferreddividends）innetinimicalexpense.Ifinterestincomeisgreaterthaninterestexpense,enhancingactivitiesproducenetinimicalincomeratherthannetinimicalexpense.Bothoperatingincome

3andnetinimicalexpense（orincome）isaftertax.Equations（3）and（4）produce

cleanmeasuresofafter-taxoperatingportabilityandtheborrowingrate:

Returnonnetoperatingassets（RNOA）=operatingincome?

netoperatingassets

（5）

AndNetborrowingrate（NBR）=netfinancingexpense?

netfinancingdebt

（6）

RNOArecognizesthatportabilitymustbebasedonthenetassetsinvestedinoperations.Soarmscanincreasetheiroperatingportabilitybyconvincingsuppliers,inthecourseofbusiness,tograntorextendcreditterms;creditreducestheinvestmentthatshareholderswouldotherwisehavetoputinthebusiness.Correspondingly,thenetborrowingrate,byexcludingnon-interestbearingliabilitiesfromthedenominator,givestheappropriateborrowingratefortheenhancingactivities.

NotethatRNOAdiffersfromthemorecommonreturnonassets（ROA）,usuallydennedasincomebeforeafter-taxinterestexpensetototalassets.ROAdoesnotdistinguishoperatingandenhancingactivitiesappropriately.UnlikeROA,RNOAexcludesinimicalassetsinthedenominatorandsubtractsoperatingliabilities.NissanandPenman（2001）reportamedianROAforNYSEandAMEXarmsfrom1963–1999ofonly6.8%,butamedianRNOAof10.0%—muchclosertowhatone

wouldexpectasareturntobusinessoperations.

1.2FinancialLeverageanditsEffectonShareholderPortability

Fromexpressions（3）through（6）,itisstraightforwardtodemonstratethatROCEisaweightedaverageofRNOAandthenetborrowingrate,withweightsderivedfromequation（3）:

ROCE=[netoperatingassets?

commonequity×RNOA],[netfinancingdebt?

Commonequity×netborrowingrate]（7）Additionalalgebraleadstothefollowingleveragingequation:

ROCE=RNOA，[FLEV×（RNOA,netborrowingrate）]（8）

WhereFLEV,themeasureofleveragefromenhancingactivities,isFinancingleverage（FLEV）=netfinancingdebtcommonequity（9）

TheFLEVmeasureexcludesoperatingliabilitiesbutincludes（asanetagainstenhancingdebt）inimicalassets.Ifinimicalassetsaregreaterthaninimicalliabilities,FLEVisnegative.Theleveragingequation（8）worksfornegativeFLEV（inwhichcasethenetborrowingrateisthereturnonnetinimicalassets）.

Thisanalysisbreaksshareholderportability,ROCE,downintothatwhichisdue

tooperationsandthatwhichisduetoenhancing.FinancialleverageleverstheROCEoverRNOA,withtheleverageeffectdeterminedbytheamountofinimicalleverage（FLEV）andthespreadbetweenRNOAandtheborrowingrate.Thespreadcanbepositive（favorable）ornegative（unfavorable）.

1.3OperatingLiabilityLeverageanditsEffectonOperatingPortability

WhileenhancingdebtleversROCE,operatingliabilitieslevertheportabilityofoperations,RNOA.RNOAisoperatingincomerelativetonetoperatingassets,andnetoperatingassetsareoperatingassetsminusoperatingliabilities.So,themoreoperatingliabilitiesaarmhasrelativetooperatingassets,thehigheritsRNOA,assumingnoeffectonoperatingincomeinthenumerator.Theintensityoftheuseofoperatingliabilitiesintheinvestmentbaseisoperatingliabilityleverage:

Operatingliabilityleverage（OLLEV）=operatingliabilities?

netoperatingassets

（10）

Usingoperatingliabilitiestolevertherateofreturnfromoperationsmaynotcomeforfree,however;theremaybeanumeratoreffectonoperatingincome.Suppliersprovidewhatnominallymaybeinterest-freecredit,butpresumablychargeforthatcreditwithhigherpricesforthegoodsandservicessupplied.Thisisthereasonwhyoperatingliabilitiesareinextricablyapartofoperationsratherthantheenhancingofoperations.Theamountthatsuppliersactuallychargeforthiscreditisdifficulttoidentify.Butthemarketborrowingrateisobservable.Theamountthatsupplierswouldimplicitlychargeinpricesforthecreditatthisborrowingratecanbeestimatedasabenchmark:

Marketinterestonoperatingliabilities=operatingliabilities×marketborrowingrate

Wherethemarketborrowingrate,giventhatmostcreditisshortterm,canbeapproximatedbytheafter-taxshort-termborrowingrate.Thisimplicitcostisbenchmark,foritisthecostthatmakessuppliersindifferentinsupplyingcreedsuppliersarefullycompensatediftheychargeimplicitinterestatthecostborrowingtosupplythecredit.Or,alternatively,thearmbuyingthegoodsorservicesis

indifferentbetweentradecreditandenhancingpurchasesattheborrowingrate.

Toanalyzetheeffectofoperatingliabilityleverageonoperatingportability,wedine:

Returnonoperatingassets（ROOA）=（operatingincome，marketinterestonoperating

liabilities）?

operatingassets（11）

ThenumeratorofROOAadjustsoperatingincomeforthefullimplicitcostoftradecredit.Ifsuppliersfullychargetheimplicitcostofcredit,ROOAisthereturnofoperatingassetsthatwouldbeearnedhadthearmnooperatingliabilityleverage.suppliersdonotfullychargeforthecredit,ROOAmeasuresthereturnfrooperationsthatincludesthefavorableimplicitcredittermsfromsuppliers.

Similartotheleveragingequation（8）forROCE,RNOAcanbeexpressedas:

RNOA=ROOA，[OLLEV×（ROOA,marketborrowingrate）]（12）

Wheretheborrowingrateistheafter-taxshort-terminterestrate.GivenROOA,theeffectofleverageonportabilityisdeterminedbythelevelofoperatingliabilityleverageandthespreadbetweenROOAandtheshort-termafter-taxinterestrate.Likeenhancingleverage,theeffectcanbefavorableorunfavorable:

FirmscanreducetheiroperatingportabilitythroughoperatingliabilityleverageiftheirROOAislessthanthemarketborrowingrate.However,ROOAwillalsobeaffectediftheimplicitborrowingcostonoperatingliabilitiesisdifferentfromthemarketborrowingrate.

1.4TotalLeverageanditsEffectonShareholderPortabilityOperatingliabilitiesandnetenhancingdebtcombineintoatotalleveragemeasure:

Totalleverage（TLEV）=（netfinan