财务管理ppt英文课件Chapter 6

Current assets are the most liquid. Some fixed assets are intangible. The more liquid a firm’s assets, the less likely
the firm is to experience problems meeting short-term obligations. Liquid assets frequently have lower rates of return than fixed assets.
➢ In the long run, all inputs of production (and hence costs) are variable.
➢ Financial accountants do not distinguish between variable costs and fixed costs. Instead, accounting costs usually fit into a classification that distinguishes product costs from period costs.
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Debt versus Equity
Generally, when a firm borrows it gives the bondholders first claim on the firm’s cash flow.
Thus shareholder’s equity is the residual difference between assets and liabilities.
➢ In the short run, certain equipment, resources, and commitments of the firm are fixed, but the firm can vary such inputs as labor and raw materials.
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16Framຫໍສະໝຸດ work for Financial Analysis
1. Analysis of the funds needs of the firm.
Trend / Seasonal Component
How much funding will be required in the future?
1. Analysis of the funds needs of the firm.
2. Analysis of the financial condition and profitability of the firm.
3. Analysis of the business risk of the firm.
Balance Sheet
➢ A summary of a firm’s financial position on a given date that shows
total assets = total liabilities + owners’ equity. Income Statement
Health of a Firm
Financial Ratios
1. Individually 2. Over time 3. In combination 4. In comparison
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Framework for Financial Analysis
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Income Statement Example
Sales
Costs Depreciation EBIT Interest Taxable Income Taxes Net Income Dividends Addition to R/E
Shareholders -- Focus on the profitability and long-term health of the firm.
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Primary Types of Financial Statements
Control -- Focus on return on investment for various assets and asset efficiency.
Understand -- Focus on understanding how suppliers of funds analyze the firm.
➢ Another noncash item is deferred taxes, which does not represent a cash flow.
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Income Statement Analysis
Time and Costs
Is there a seasonal component?
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Framework for Financial Analysis
1. Analysis of the funds needs of the firm.
2. Analysis of the financial condition and profitability of the firm.
Business risk relates to the risk inherent in the operations of the firm.
Examples:
Volatility in sales Volatility in costs Proximity to break-even point
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Examples of External Uses of Statement Analysis
Trade Creditors -- Focus on the liquidity of the firm.
Bondholders -- Focus on the long-term cash flow of the firm.
3. Analysis of the business risk of the firm.
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The Balance Sheet
Current Assets
Net
Working Capital
Current Liabilities
Fixed Assets
1.Tangible fixed assets
2.Intangible fixed assets
Long-Term Debt Shareholders’ Equity
Financial leverage increases the potential reward to shareholders, but also increases the potential for financial distress and business failure.
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Total Value of Assets
Total Value of Liabilities and Shareholders’ Equity
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Balance Sheet Analysis
When analyzing a balance sheet, the financial manager should be aware of three concerns:
Market value is a completely different concept.
➢ Current value of a firm relates to market value, or the price that the asset would yield in the current market place.
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Income Statement Analysis
Non Cash Items
➢ Depreciation is the most apparent. No firm ever writes a check for “depreciation”.
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Framework for Financial Analysis
1. Analysis of the funds needs of the firm.
2. Analysis of the financial condition and profitability of the firm.
1. GAAP 2. Non Cash Items 3. Time and Costs
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Generally Accepted Accounting Principles (GAAP)
The matching principal of GAAP dictates that revenues be matched with expenses. Thus, income is reported when it is earned, even though no cash flow may have occurred.
$2000
1400 100 500 100 400 200 $200 80 $120
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Income Statement Analysis
There are three things to keep in mind when analyzing an income statement:
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Value versus Cost
Generally Accepted Accounting Principles (GAAP) show that audited financial statements show assets at historical cost or book value.
Examples of Internal Uses of Statement Analysis
Plan -- Focus on assessing the current financial position and evaluating potential firm opportunities.
➢ A summary of a firm’s revenues and expenses over a specified period, ending with net income or loss for the period.
Revenue – Expenses ≡ Income
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➢ Accounting liquidity ➢ Debt versus equity ➢ Value versus cost
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Accounting Liquidity
Refers to the ease and quickness with which assets can be converted to cash.