财务报表分析与证券估值_英文PPT (20)

Cash Basis
Chapter Twenty
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
The Analysis of Credit Risk and Return
Prepared by: Stephen H. Penman – Columbia University With contributions by
Interest Coverage= Operating Income Net Interest Expense Unlevered Cash Flow from Operations Net Cash Interest
Times Interest Earned
Interest Coverage=
The reformulation follows that in Chapter 11
20-9
Ratio Analysis: Short-Term Liquidity Ratios
• Liquidity Stock Measures
Current Ratio=
Current Assets Current Liabilities Cash+Short-term Investments+Receivables Current Liabilities
20-11
Ratio Analysis: Long-term Solvency Ratios
• Solvency Stock Measures
Debt to Total Assets=
Total Assets Liabilities+Total Equity
Total Debt Current+Long-term
• The difference between Type I and Type II errors is predicting
defaults • How pro forma analysis aids in assessing default risk
• How value-at-risk analysis is used to assess default risk
• How financial strategy works
20-3
Default Risk and Default Premiums • Required Return on Debt = Risk-free Rate + Default Premium
• The default premium is determined by the risk that the debtor could defulated Income Statements and Cash Flow Statements
Income Statement: • Distinguish income from operations that “covers” net financial expense
20-5
Ratio Analysis for Default Evaluation Steps: 1. Reformulate financial statements 2. Calculate ratios
20-6
Reformulating the Balance Sheet for Credit Analysis
Total Debt Debt to Equity= Total Equity Long-term Debt Long-term Debt + Equtiy
Long-term Debt Ratio=
20-12
Ratio Analysis: Long-term Solvency Ratios
• Solvency Flow Measures
• Add the LIFO reserve to inventory and to shareholder’s equity to convert LIFO to a FIFO basis.
20-7
Off-Balance-Sheet Financing
Off-balance-sheet financing transactions are arrangements to finance assets and create obligations that do not appear on the balance sheet. Examples:
Nir Yehuda – Northwestern University
Mingcherng Deng – University of Minnesota Peter D. Easton and Gregory A. Sommers – Notre Dame and Southern Methodist Universities Luis Palencia – University of Navarra, IESE Business School
• Similar terms:
Required return on debt
Cost of debt Price of credit
20-4
The Suppliers of Credit • Public debt market investors who include (long-term) bondholders and (short-term) commercial paper holders. • Commercial banks that make loans to firms. • Other financial institutions such as insurance companies, finance houses and leasing firms make loans, much like banks, but usually with specific assets serving as collateral. • Suppliers to the firm who grant (usually short- term) credit upon delivery of goods and services.
Cash Flow Ratio=
Cash Flow from Operations Current Liabilities
Cash+Short-term Investments +Receivables Defensive Interval= ? 65 Capital Expenditures Unlevered Cash Flow from Operations Cash Flow to Capital Expenditures= Capital Expenditures
Cash Basis
Operating Income+Fixed Charges Fixed Charges Unlevered Cash Flow from Operations + Fixed Charges Fixed Charge Coverage= Fixed Charges Fixed Charge Coverage=
The key idea in the reformulation of the balance sheet is to order assets by liquidity and liabilities by maturity. Annotate as you reformulate. Issues: • • • • • • • • Detail on different classes of debt and their varying maturities is available in the debt footnotes; this detail can be brought on to the face of reformulated statements. Debt of unconsolidated subsidiaries (where the parent owns less that 50%, but has effective obligations) should be recognized. Long-term marketable securities are sometimes available for sale in the short-term if a need for cash arises. Long-term debt (of similar maturity) can be presented on a net basis. Remove deferred tax liabilities that are unlikely to reverse, from liabilities to shareholders’ equity. Off-balance-sheet debt should be recognized on the face of the statement. Contingent liabilities that can be estimated should be included in the reformulated statements. The risk in derivatives and other financial instruments should be noted.
The reformulation follows that for profitability analysis in Chapter 10