金融研究方法.docx

1、金融研究方法The capital operation of Midea in electrical equipment market research1 AbstractThis essay is about the electrical equipment company and we selected Midea as our main company to investigate. The others companies for comparison is Gree, Konka and TCL .We find these four companies annual stateme

2、nt in 2006 to 2009 to compared their data ,and we selected the year of 2009 as our based year. The essay compared the years data and the four companys data.Our purpose is to survey the electrical equipment market capital operation. We use many formulas to calculate the company annual statement data

3、,as the cash ration , total debt ration ,equity multiplier ,inventory turnover ,receivables turnover current ratio ,quick ratio, total asset turnover and return on assets and return on equity.2 Introduction to the companyName IntroductionMidea Group was established in 1968.Now it is one of the large

4、st manufacturing and exportation bases of household appliances in China. Midea Group currently has 70,000 employees. Their marketing network covers all over the nation, and they have a dozen branches in the United States, Germany, Japan, Hong Kong, South Korea, Canada and Russia. Major products by M

5、idea Group include air-conditioners, electric fans, electric cookers, refrigerators, microwave ovens, water dispensers, washing machines, electric heaters, dishwashers.Website3 Explanation on the financial ratios3.1 Short-term solvency,or liquidity,ratiosCurrent Ratio: A liquidityratio that measures

6、a companys ability to pay short-term obligations.Quick Ratio: An indicator of a companys short-term liquidity.The quick ratio measuresa companysability to meetits short-term obligations withits most liquid assets.Cash Ratio: The ratio of a companys total cash and cash equivalentsto its current liabi

7、lities.Thecashratio is most commonly used as a measure of company liquidity. It can therefore determine if, and how quickly, the companycan repayits short-term debt.3.2 Long-term solvency,or financial leverage,ratiosTotal Debt Ratio: A ratio that indicates what proportion of debt a company has relat

8、ive to its assets. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load.Equity multiplier: This ratio showsa companystotal assetsper dollar of stockholders equity.3.3 Asset utilization,or turnover,ratiosInventory turnover

9、: A ratio showing how many timesa companysinventory is sold and replaced over a period.Receivable turnover: An accounting measure used to quantify a firms effectiveness in extending credit as well as collecting debts.The receivables turnoverratio is an activity ratio,measuring how efficiently a firm

10、 uses its assets.Total asset turnover: The amount of sales generated for every dollars worth of assets. It measuresa firms efficiency at using its assets in generating sales or revenue - the higher the number the better.3.4 Profitability ratiosReturn on assets (ROA): An indicator of how profitable a

11、 company is relative to its total assets.ROA gives an ideaas to how efficientmanagement isat using its assets to generate earnings.Return on equity (ROE): The amount of net incomereturnedas a percentageof shareholders equity.Return on equitymeasures a corporations profitabilityby revealing how muchp

12、rofit a company generateswith the money shareholders have invested.4 Calculation the financial ratios of the company and discuss by techniques of time-trend analysis and peer group analysis.4.1 The different ratios in Midea from the year 2006 to 2009.4.1.1 Short-term solvency,or liquidity,ratios rat

13、io2009年2008年2007年2006年current ratio1.12 0.86 1.07 1.03 quick ratio0.82 0.54 0.48 0.49 cash ratio0.20 0.23 0.16 0.14 Current ratio, quick ratio and cash ratio as short-term solvency ratios are intended to provide information about Midea companys liquidity. From the first blue line, its compare 2007 a

14、nd 2006 that the Midea company had no significant increase in liquidity ratio. Its also said that the companys short-solvency maintained standards. In 2008 year which was affected by the financial crisis, current ratio was 0.86(less than 1), mean that net working capital is negative. When in 2009, i

15、t peaked at 1.12 which indicates liquidity.In the second red line, from 2006 to 2009, the Midea companys quick ratio remained relatively increasing. Although the company liquidity was low, there was a gradual rise trend.There was a fluctuation in the trend of cash ratio in the third green line. In t

16、his period, the company kept a relatively low cash ratio, which was mean that an efficient use of cash and other short-term assets.In conclusion, the graph shows that Midea has a better liquidity and can bear the short-term risk. Besides , it also may indicate an good use of assets.4.1.2 Long-term s

17、olvency,or financial leverage,ratiosratio2009年2008年2007年2006年total debt ratio0.60 0.69 0.67 0.72 equity multiplier1.67 3.21 3.06 3.57 We can see from the above chart,Mideas total debt ratio grows slowly but at a lower level in 06-09 year. From the creditor position, Mideas possesses weaker debt-repa

18、ying ability and financial risk is higher,so enterprises main risks undertake by the creditor. 09 compared with prior three years ratio had a slight decline,and the financial risk lower.Mideas equity multiplier had a significant decrease that the mix value about 1.9 compared with the past three year

19、s.Its explain that the companys solvency improved,financial risk reduction and owners equity increased the bear ability of debt-repaying risk.In other words, Mideas long-term solvency ratio is more appropriate ,managers can effectively use of shareholders money to help shareholders conduct the large

20、 scale of operation with less money.4.1.3 Asset utilization,or turnover,ratiosratio2009年2008年2007年2006年inventory turnover6.35 8.49 4.66 4.27 receivables turnover10.13 15.43 22.41 21.58 total asset turnover0.15 1.94 1.92 1.62 Inventory turnover is a measure of the utilization of the investment in inv

21、entory.The higher this ratio is,the more efficiently we are managing inventory.From 2006 to 2007,the inventory turnover rate increased.That meant the firm used its assets to generate sales efficiently.But from 2007 to 2009,the inventory turnover rate was decreased,the managing inventory was less eff

22、iciently and less liquidity.Receivables turnover gives some indication of how fast we can sell products.From 2006 to 2008,Medias receivables turnover were grown steady. But in 2009,the receivables turnover is a little fell back.That means Medias ability of collecting outstanding credit account and r

23、eloaned the money is weakerMoving away from specific accounts like inventory or receivables,we can consider the total asset turnover.In 2006,the total asset turnover of Media was low, but from 2007 to 2009, the total asset turnover was retained about 1.9.It shows that Media used its assets to genera

24、te sales efficiently and intensively. 4.1.4 Profitability ratiosratio2009年2008年2007年2006年return on assets0.08 0.07 0.10 0.04 return on equity0.20 0.21 0.30 0.15 The line chart provides the information about return on assets and return on equity. This two ratios show the profitability measures of Mid

25、ea. According to the chart, the overall trend between 2006 and 2009 increased. In 2006, return on assets was 0.041 and return on equity was 0.15. The highest points of ROA and ROE were in 2007 and the value of ROA was 0.1 and ROE was 0.3. After the growth period, ROA and ROE dropped significantly be

26、cause of the financial crisis in 2008. The value of ROA increased to 0.08, and ROE was 0.20. The high values of ROA and ROE means that the high ability of profit. So, in 2007, Mideas ability of profit was the highest between 2006 and 2009.4.2 The different ratios in different firms in 2009.4.2.1 Sho

27、rt-term solvency,or liquidity,ratios ratio美的格力康佳TCLcurrent ratio1.12 1.04 1.24 1.27 quick ratio0.86 0.90 0.86 0.93 cash ratio0.20 0.23 0.08 1.56 From the chat above, we can see that the Current Ratio and Quick Ratio of the four companies are around.All of their Current Ratios are higher than 1 which

28、 means that net work capital is positive,so they are healthy firms.We can see that TCL have higher ratios than the other three companies,it means that TCL have better ability to pay its bills over the short run without undue stress. In 2009,Midea have a middle level of Short-Term Solvency in the fou

29、r companies.These Short-Term Solvency show that TCL has the highest ability of cash flow in the four firms in 2009.4.2.2 Long-term solvency,or financial leverage,ratiosratio美的格力康佳TCLtotal debt ratio0.60.790.570.72equity multiplier1.674.843.33.59As it is well known that, the equity multiplier and tot

30、al debt ratio belong to the long-term solvency or financial leverage, ratios,which are intended to address the firms long-run ability to meet its obligations.From the line chart above,we find that in the equity multiplier part,Midea fell to hit the lowest point in the 4 firms.On the other hand,Gree

31、reached a peak.That means Gree has higher financial leverage and its relying.In the total debt ratio part,Gree also got the highest point,and Konka took the lowest.The total debt ratio all of the firms are less than 1,that indicates that the 4 firms have more assets than debet.So,Gree has a stronger ability to meet its obligations in the long-run than the other 3 firms during the year 2009.4.2.3 Asset utilization,or turnover,ratiosratio美的格力康佳TCLinventory turno