AnalysisandValuation财务报表分析台湾中兴大学讲义
合集下载
相关主题
- 1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
- 2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
- 3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。
innovations, work stoppages, and raw material constraints
Earnings Persistence
Recasting and Adjusting
Objectives of Recasting
1. Recast earnings and earnings components so that stable, normal and continuing elements comprising earnings are distinguished and separately analyzed from random, erratic, unusual and nonrecurring elements
Specific Recasting Procedures • Discretionary expenses are segregated • Distinct component来自百度文库 are segregated (such as equity in income of
unconsolidated subsidiaries) and often reported net of tax • When components of continuing income are separately
➢ Other financial statements and notes ➢ Management commentary in financial statements ➢ Management’s Discussion and Analysis ➢ Other: product-mix changes, technological
reclassified, their pre-tax amounts along with their tax effects must be removed • Income tax disclosures enable one to separate factors that either reduce or increase taxes such as:
Two common methods to help assess earnings persistence:
❖ Recasting of income statement ❖ Adjusting of income statement
Earnings Persistence
Recasting and Adjusting
• Attributes of earnings persistence include:
Stability Predictability Variability Trend Earnings management Accounting methods
Earnings Persistence
Recasting and Adjusting
Information for Recasting and Adjusting
➢ Income statement, including its subdivisions: Income from continuing operations Income from discontinued operations Extraordinary gains and losses Cumulative effect of changes in accounting principles
Earnings Persistence
Recasting and Adjusting
General Recasting Procedures
Income statements of several years (typically at least five) are recast
Recast earnings components to yield meaningful classifications and a relevant format for analysis
Earnings Persistence
Recasting and Adjusting
• Earnings persistence is a key to effective equity analysis and valuation
• Analyzing earnings persistence is a main analysis objective
Components can be rearranged, subdivided, and tax effected Total recasted components must reconcile to reported net income
Earnings Persistence
Recasting and Adjusting
2. Recast elements included in current earnings that should more properly be included in the operating results of one or more prior periods
Recasting and adjusting earnings also aids in determining earning power
➢ Deductions—tax credits, capital gains rates, tax-free income, lower foreign tax rates
➢ Additions—additional foreign taxes, non-tax-deductible expenses, and state and local taxes (net of federal tax benefit)
Earnings Persistence
Recasting and Adjusting
Objectives of Recasting
1. Recast earnings and earnings components so that stable, normal and continuing elements comprising earnings are distinguished and separately analyzed from random, erratic, unusual and nonrecurring elements
Specific Recasting Procedures • Discretionary expenses are segregated • Distinct component来自百度文库 are segregated (such as equity in income of
unconsolidated subsidiaries) and often reported net of tax • When components of continuing income are separately
➢ Other financial statements and notes ➢ Management commentary in financial statements ➢ Management’s Discussion and Analysis ➢ Other: product-mix changes, technological
reclassified, their pre-tax amounts along with their tax effects must be removed • Income tax disclosures enable one to separate factors that either reduce or increase taxes such as:
Two common methods to help assess earnings persistence:
❖ Recasting of income statement ❖ Adjusting of income statement
Earnings Persistence
Recasting and Adjusting
• Attributes of earnings persistence include:
Stability Predictability Variability Trend Earnings management Accounting methods
Earnings Persistence
Recasting and Adjusting
Information for Recasting and Adjusting
➢ Income statement, including its subdivisions: Income from continuing operations Income from discontinued operations Extraordinary gains and losses Cumulative effect of changes in accounting principles
Earnings Persistence
Recasting and Adjusting
General Recasting Procedures
Income statements of several years (typically at least five) are recast
Recast earnings components to yield meaningful classifications and a relevant format for analysis
Earnings Persistence
Recasting and Adjusting
• Earnings persistence is a key to effective equity analysis and valuation
• Analyzing earnings persistence is a main analysis objective
Components can be rearranged, subdivided, and tax effected Total recasted components must reconcile to reported net income
Earnings Persistence
Recasting and Adjusting
2. Recast elements included in current earnings that should more properly be included in the operating results of one or more prior periods
Recasting and adjusting earnings also aids in determining earning power
➢ Deductions—tax credits, capital gains rates, tax-free income, lower foreign tax rates
➢ Additions—additional foreign taxes, non-tax-deductible expenses, and state and local taxes (net of federal tax benefit)