Business Diagnosis and Performance ppsx

Business Diagnosis and Business Diagnosis and Performance Performance Master of Business Administration Master of Business Administration Lecturer Lecturer Dr Ian Mackechnie Dr Ian Mackechnie Email: ianmmac2004@yahoo.com.au Email: ianmmac2004@yahoo.com.au Why This Subject is Important Why This Subject is Important Tại sao môn này là quan trọng Tại sao môn này là quan trọng • Companies need to understand how well they are performing • Problem areas need to be identified • Investors need to know about their company performance • Stakeholders in companies (suppliers, lenders, government departments) need to know the financial strength of the company Các công ty cần phải hiểu thực hiện như thế nào thì tốt . Vấn đề các khu vực cần phải được xác định . Nhà đầu tư cần biết về hiệu suất công ty của họ . Các bên liên quan trong các công ty (nhà cung cấp, cho vay, cơ quan chính phủ) cần phải biết sức mạnh tài chính của công ty Business Structures Business Structures Các cấu trúc kinh doanh Các cấu trúc kinh doanh • Sole Trader: owner responsible for all the debts of the business • Partnership: partners all equally responsible for debts of the firm • Company: shareholder’s liability for debts of firm limited to the amount of shares they have in the company Thương nhân duy nhất: chủ sở hữu chịu trách nhiệm cho tất cả các khoản nợ của doanh nghiệp . Quan hệ đối tác: các đối tác tất cả đều chịu trách nhiệm về các khoản nợ của công ty . Công ty: cổ đông của trách nhiệm về các khoản nợ của công ty giới hạn số lượng cổ phần mà họ có trong công ty Financial Analysis Financial Analysis Phân tích tài chính Phân tích tài chính • We need to understand the basic the basic financial statements of the company so that we can diagnose and understand the strengths and weaknesses, and the potential dangers that the firm may be facing • Understanding financial statements also helps us to recognize good companies which we may wish to invest in or trade with Chúng ta cần phải hiểu cơ bản báo cáo tài chính cơ bản của công ty để chúng tôi có thể chẩn đoán và hiểu được những điểm mạnh và điểm yếu, và những mối nguy hiểm tiềm năng mà công ty có thể phải đối mặt với . Hiểu biết về báo cáo tài chính cũng giúp chúng ta nhận ra công ty tốt mà chúng ta có thể muốn đầu tư hoặc thương mại với Business Financial Statements Business Financial Statements Báo cáo tài chính Kinh doanh Báo cáo tài chính Kinh doanh There are 3 main financial statements of a firm that we need to understand: 1. Income Statement (Profit & Loss Statement) 2. Balance Sheet 3. Cash Flow Statement Hiện có 3 báo cáo chính tài chính của một công ty mà chúng ta cần phải hiểu: . Báo cáo thu nhập (lợi nhuận & Tuyên bố tổn thất) . Bản đối chiếu . Báo cáo lưu chuyển tiền tệ Revisiting Basic Accounting Revisiting Basic Accounting The Income Statement The Income Statement Xem xét lại kế toán cơ bản Báo cáo thu nhập Xem xét lại kế toán cơ bản Báo cáo thu nhập The Income Statement, or Profit & Loss Statement, records the incomes, the expenses, and the net profit or loss for an accounting period Revenue minus Expenses = Income (net profit/loss) Example – Income Statement Example – Income Statement Ví dụ - Báo cáo thu nhập Ví dụ - Báo cáo thu nhập XYZ Company – Income Statement for year ending 2008 Sales $ 4,195,197 Cost of Goods Sold 2,673,129 Gross Profit 1,522,068 Expenses 465,831 Depreciation 160,119 Total Operating Expenses $ 625,950 Operating Profit $ 896,118 Interest Expense 17,849 Earnings before taxes 878,269 Abnormal expense items 120,000 758,269 Provision for Income Tax 298,052 Net Income 460,217 Balance Sheet Balance Sheet Bản cân đối Bản cân đối The accountant’s snapshot of the firm’s accounting value at a particular date Ảnh chụp của kế toán giá trị kế toán của công ty vào một ngày đặc biệt Assets = Liabilities + Shareholder’s Equity Tài sản = Nợ phải trả + Vốn chủ sở hữu của cổ đông Example – Balance Sheet Example – Balance Sheet Ví dụ - Bảng cân đối Ví dụ - Bảng cân đối Assets Liabilities Current Current Cash Accounts payable Accounts receivable Short term debt Inventories Investments Fixed Non-Current Machinery & equip Loans Buildings Land Intangibles Equity trademarks Shareholder’s funds goodwill Tài sản Nợ phải trả . Hiện tại hiện tại . Tài khoản tiền phải nộp . Các khoản phải thu ngắn hạn nợ . Hàng tồn kho . Đầu tư . Sửa lỗi không hiện tại . Máy móc, trang bị cho vay . Tòa nhà . Đất đai . Vốn cổ phần vô hình . nhãn hiệu hàng hoá quỹ của cổ đông ưu đãi Financial Cash Flows Financial Cash Flows • In finance, the most important item that can be extracted from the financial statements is the actual cash flow of the firm • Cash flows are simply a summary and classification of what has gone into the bank account of the firm and what has been withdrawn between two periods [...]... Evaluating Financial Performance Financial Analysis • Financial analysis is the assessment of a firm’s past, present and anticipated future financial condition Its objectives are to determine the firm’s financial strengths and to identify its weaknesses Using Financial Ratios Financial ratios provide useful tools for analysis when compared against a standard or norm Two such standards are commonly... on investment reflects the rate of return on the firm’s total investment before interest and taxes For SKP, this return measure is computed as follows: Operating income = net operating income Total assets = $ 22,892,000 $167,698,000 = 0.136 or 13.6% SKP produced a 13.6% return on its total assets before interest and taxes have been paid Financial Ratios- Profitability The total asset turnover ratio... provide the basis for answering two questions: Does the firm have sufficient cash or near cash assets to pay its bills on time? How quickly does the form convert its liquid assets (accounts receivable and inventory) into cash? Current Ratio Current Ratio The current ratio is computed as follows: Current ratio = current assets _ current liabilities = $ 70,474,000 $ 28,928,000 = 2.44: 1 This means that... over (replaced) during the year Inventory turnover = cost of goods sold Inventories = $148,972,000 $ 14,195,000 = 10.49 times Thus, SKP turns over its stock 10.5 times a year Q2: Evaluating Financial Performance Financial Ratios- Profitability The gross profit margin is calculated as follows: Gross profit margin = gross profit Net sales = $ 34,543,000 $183,515,000 = 0.188 or 18.8% Thus, SKP’s gross... used • The first consists of similar ratios for the same firm from previous financial statements An analysis based on comparisons of this type is commonly referred to as a trend analysis • A second standard comes from the ratios of other firms that are considered comparable in their general characteristics with the subject firm – generally this involves the use of published industry-average ratios... non-current assets, the non-current asset turnover ratio is calculated as follows: Non-current asset turnover = Sales _ Non current assets = $183,515,000 $ 97,224,000 = 1.89 times Q3: Evaluating Financial Performance Financial Ratios- Financing Investments The debt ratio measures the extent to which the total assets of the firm have been financed using borrowed funds For SKP, the ratio is computed as follows:... SKP’S ratio is computed as follows: Times interest earned = net operating income (profit) (or EBIT) Net interest expense = $ 22,892,000 ($ 710,000 – ($310,000)) = 57.23 times Q4: Evaluating Financial Performance Financial Ratios- Return on Investment Net profit margin The net profit margin involves the net after tax profits of the firm as a percentage of sales For SKP the net profit margin is computed... Added EVA represents economic profit, which is always less than accounting profit It is fairly simple to determine: It is the after-tax operating profits minus the appropriate capital charge for both debt and equity The exact formula is: EVA = NOPAT – c% (TC) Where EVA = Economic Value Added NOPAT = net operating profits after taxes C% = percentage cost of capital TC = total capital Economic Value Added... Shareholder equity = $40,104 x 10% = $4,014 In other words, in 2006 Microsoft added value beyond the normal rate of investment by $8.589 billion Clearly, Microsoft was adding value for its shareholders and creating wealth in the global economy Economic Value Added Economic Value Added Net operating profits after taxes Equity cost of capital * Economic Value Added (EVA) SKP, 2008 (in millions) $18,473... 10,383 $ 8,089 * Shareholder equity = $129,789 x 8% = $10,383 In other words, in 2008 SKP added value beyond the normal rate of investment by $8,089,000 Clearly, SKP was adding value for its shareholders and creating wealth in the global economy Earnings per Share This measures the amount of profit attributable to each unit of ordinary shares on issue Earning per share = Net Profit Number of ordinary . Business Diagnosis and Business Diagnosis and Performance Performance Master of Business Administration Master of Business Administration Lecturer Lecturer Dr. tài chính • We need to understand the basic the basic financial statements of the company so that we can diagnose and understand the strengths and weaknesses, and the potential dangers that. tài chính của công ty Business Structures Business Structures Các cấu trúc kinh doanh Các cấu trúc kinh doanh • Sole Trader: owner responsible for all the debts of the business • Partnership: