财务报表分析英文课件cha.ppt

On Project Report/Readings,Market value,use number of shares outstanding,do not use average number of shares outstandingIdentify source of data or quotesCommon size analysis,show amounts and percentages Only analyze notes that are related to our current lectureTake turn to write the report,do not leave to one personIn final exams,I may provide you with raw materials and a sample article from our readings for you to analyze the raw materials and write a similar article.So get familiar with all articles.Again,understand but do not memorize.,Firm Names,Eagle Eye:Valuation Analysis StrategyInvestorium,Statement of Cash Flow,Cash flow from Operating activities:（营运活动）cash receipts from customerscash disbursed to:suppliers of merchandise employees for salariesCash flow from investing activities:（投资活动）purchase of buildings,equipments,plantsproceeds(进帐）from sales of long term assetsCash flow from financing activities:（融资活动）borrowing/repay long term debtsissuing new shares,Overview of the Statement of Cash Flows,In AOL 2000 balance sheet,cash and cash equivalent increased from$936 millions to$2,490 millions.How?The statement of cash flows(a)explains the reasons for a change in cash.(b)classifies the reasons for the change as an operating,investing or financing activity.(c)reconciles net income with cash flow from operations.,Montgomery Ward b.f.bankrupt,The difference between earnings and cash flows,I/S Explain change in retained earningsI/S is accrued-basedI/S recognize property rightsI/S require estimatesI/S is an opinion I/S is prone to(易于）manipulationFirms can survive a long string（长串）of negative earnings,SCF explain change in cash and cash equivalentN/ASCF emphasize“actual possessment”SCF does notSCF is a factSCF is so to a much less degreeFirms go bankrupt with a long string of negative cash flows(outflow),Cash flow equation,A=L+EA=L+Ecash+non-cash A=L+Ecash+current A(other than cash)+non-current A=current L+non-current L+Ecash=current L+non-current L+E-current A(other than cash)-non-current A,Cash flow from operation,Cash flows related to selling goods and services;that is,the principle business(主营业务)of the firmThe main source of payoffs to shareholders and creditorsThe reason for the firms to existIf firms do not in the long run generate more cash from operation than the returns of funds to shareholders and creditors,the firms go bankrupt,Cash flow from operation-components,Cash collected from customersCash collected as interest(利息）on loans to othersCash collected as dividends（股利）on investment on other firms stocksCash paid to suppliersCash paid to employeesCash paid to other service providers:landlords,marketing agency,auditors,consultants,Cash paid to governmentCash paid to creditors as interest on borrowed money,Cash flow from investing activities,Cash flows related to the acquisition or sale of non-current assets:investment,land,property,plants,equipmentsTo maintain the current productivity of the operation,a firm must replace assets that they wear out(消耗）To grow its operation,a firm must acquire additional assetsOld assets may be sold as they become obsolete(过时）,or as the firm change productionInvesting activities thus provide resource to generate cash flow from operations,Cash flow from investing activities-components,Cash received from sales of land,investment,property,plants and equipmentCash paid to acquire land,investment,property,plants and equipment,Cash flow from financing activities,Cash flows related to long-term liabilities and owners equityThe source of cash to be used in investing and operating activitiesTwo sources:shareholders and creditorsThis part of SCF also indicates how much cash the firm returns to its capital providers,i.e.,cash distribution to shareholders and creditorsNote:short-term liabilities generated in operation,such as account payable,is not related to this category,Cash flow from financing activities-components,Cash received from issuing corporate debts or taking up loansCash received from issuing common shares or preferred sharesCash paid to repay debts or loansCash paid to repurchase sharesCash paid to shareholders as dividends,Relations among the cash flows from the three categories of activities,1,CF from Fin.Act.,CF fromInv.Act,CFFromOp.Act.,Free Cash Flow,=Cash flow from operating activities+Cash flow from investing activitiesIf positive,normal operation generates more cash that it consumes,such as the case of a stable firmIf negative,normal operation generates insufficient amount of cash to be self-sustaining,such as a growing firm,Two methods to prepare the operating portion of SCF,Direct method of presentation calculates cash flow from operations by subtracting cash disbursements to supplies,employees,and others from cash receipts from customers.The indirect method calculates cash flow from operations by adjusting net income for noncash revenues and expenses.Most firms present their cash flows using the indirect method.,SCF-Direct method,The direct method is simple and straight:Cash collected from customersCash collected as interest(利息）on loans to othersCash collected as dividends（股利）on investment on other firms stocksCash paid to suppliersCash paid to employeesCash paid to other service providers:landlords,marketing agency,auditors,consultants,Cash paid to governmentCash paid to creditors as interest on borrowed money,Indirect method SCF reconciles net income with cash flow from operation,cash=current L+non-current L+E-current A(other than cash)-non-current Acash=current L-current A(other than cash)+non-current L+E non-current A,Op.,Fin.,Inv.,Indirect method SCF reconciles net income with cash flow from operation,Net Income is accrual-based,when we calculate net income,we do not care whether cash has been received or paidBut current assets and current liabilities accounts are impacted when we calculate net income,e.g.,we debit account receivable and credit revenue when finishing a sales activity,Indirect method SCF reconciles net income with cash flow from operation,So in the example above,net income is higher than cash flow from operation because this transaction increases net income by increasing revenues,but does not increase cash because we debit account receivable and no cash is collected yet.Therefore,to get to the balance of cash from net income,we subtract the increase in account receivable account.This procedure confirms to the cash equation in which increase(positive change)in current assets other than cash decrease cash flow from operation.,Indirect method SCF reconciles net income with cash flow from operation,The indirect method:Net income+depreciationIncrease in current assets accounts+decrease in current assets accountsdecrease in current liabilities accounts+increase in current liabilities accounts=Cash flow from operation,Notes to financial statements-on cash flows,Is cash the king?,Cash is the ultimate payoffs to capital providersEstablished finance theory told us the the value of a firm is the present value of all its future dividends,Is cash the king?,Earnings do not always go hand-in-hand with cash flows-Operational reason:a growing firm can have fast growth in earnings,but due to the expansion,it is consistently short of cash;a declining firm may have declining earnings but throw out large amount of cash due to lack of investing opportunities-Earnings management reason:A firm may manage the non-cash earnings to increase earnings,but not to increase cash flow.,Cash flow pattern for different firms,Is cash the king?-Sloan 1996 Accounting Review,Is cash the king?-Sloan 1996 Accounting Review,Is cash the king?-Sloan 1996 Accounting Review,Is cash the king?-Barth el al.(2001),Investing Motto,You can pocket cash,but you can not pocket earnings!-myself,