财务报表分析 南航

Evaluating financial ReportingQuality

1.Measuring earning quality

1.Balance-Sheet-Based Accruals

●For China Southern Airlines Company in 2011

Net Operating Assets:

NOA t = (Total assets –cash- marketable securities)–(Total liabilities – Total debt)

= 56,741,000,000.00

Aggregate accruals t B/S = NOA t – NOA t-1= 5,050,000,000.00

Accrual ratio t B/S=0.093145935

●For Air China in 2011

Net Operating Assets:

NOA t = (Total assets –cash- marketable securities)–(Total liabilities – Total debt)

= 67,479,760,000.00

Aggregate accruals t B/S = NOA t – NOA t-1=8,868,096,000.00

Accrual ratio t B/S=0.140661366

Using the balance-sheet-based accrual ratio, China Southern Airlines Company hashigher earnings quality (i.e., lower accruals ratio) in 2011.

2.Cash-Flow-Statement-Based Accruals

●For China Southern Airlines Company in 2011

Aggregate accruals t CF = NI t– (CFO t + CFI t)=14,214,000,000.00

Accrual ratio t CF=[NI t– (CFO t + CFI t)]/[( NOA t + NOA t-1)/2]= 0.262173528

●For Air China in 2011

Aggregate accrualstCF = NIt – (CFOt + CFIt)=3,155,009,000.00

Accrual ratiotCF=[NIt – (CFOt + CFIt)]/[( NOAt + NOAt-1)/2]=0.05

Using the cash-flow-statement-basedmeasure, China Southern Airlines Company actually shows

lower earnings qualitythan in Air China in 2011.

Revenue Recognition Issues

2011 2010 2009 2008 China

Southern

Airlines

Accounts

2,186,000,000.00 2,005,000,000.00 1,366,000,000.00 1,319,000,000.00 receivable

Accounts

44.2409926 46.15129042 41.7452514 42.78013647 receivable

turnover

Since the Accounts receivableturnovers didn’t changed much from 2008 to 2011, we think that

China Southern Airlines Company didn’t use early recognition to make the revenues look better.

2. Incentives of earnings manipulation

China

Southern

2011 2010 2009 2008 As we can see that the NI in 2008 was negative, mainly due to the increasing fuel price in 2008. But in 2009, the NI was positive, 554,000,000.00. And in 2010, the NI has increased by 1059.75%, which is anextraordinary increase. What contribute to the extraordinary increase in NI in 2009 and 2010? Is it a real earning or manipulation?

● Earnings manipulation by Asset impairment loss

China

Southern 2011 2010 2009

2008 As we can see the asset impairment lossin 2008 is extraordinary large, so we doubt that, the China Southern Airlines Company may recorded a large asset impairment loss on purpose because they knew that NI in 2008 is negative whatever, so they just make the loss larger in 2008 in order to make NI in 2009 looked better.

And as the NI in 2009 is not very high, the asset impairment loss in 2009 is much smaller even compared with 2010 or 2011. If the China Southern Airlines Companyrecorded a large asset impairment loss in2009, then the NI in 2009 will decrease significantly.

3. Corporate governance

● Management compensation

Key management personnel receive compensation in the form of fees, salaries, allowances, discretionary bonuses and retirement scheme contributions. Key management personnel received total compensation of RMB4.31 million for the six months ended 30 June 2012.

● Dividend payment

China Southern Airlines 2011

2010

2009 2008

As we can see the dividend payment were relatively stable compared with the net income. However, the dividend payment may not be sustainable because the NI is not so stable and the ROE is small, which reflect a weak earning ability.