Đang tải... (xem toàn văn)
Essentials of Investments: Chapter 14 - Financial Statement Analysis includes Financial Statement Analysis, Financial Statements, Profitability Measures, Financial Leverage and ROE, Decomposition of ROE, Choosing a Benchmark.
CHAPTER 14 Financial Statement Analysis INVESTMENTS | BODIE, KANE, MARCUS McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc All rights reserved 19-2 Financial Statement Analysis • Financial statement analysis can be used to discover mispriced securities • Financial accounting data are widely available, but – Accounting earnings and economic earnings are not always the same thing! INVESTMENTS | BODIE, KANE, MARCUS 19-3 Financial Statements • Income Statement: – Profitability over time • Balance Sheet: – Financial condition at a point in time • Statement of Cash Flows: – Tracks the cash implications of transactions INVESTMENTS | BODIE, KANE, MARCUS 19-4 Table 19.1 Consolidated Statement of Income for Hewlett-Packard, 2009 INVESTMENTS | BODIE, KANE, MARCUS 19-5 Table 19.2 Consolidated Balance Sheet for Hewlett-Packard, 2009 INVESTMENTS | BODIE, KANE, MARCUS 19-6 Table 19.3 Statement of Cash Flows for Hewlett-Packard, 2009 INVESTMENTS | BODIE, KANE, MARCUS 19-7 Accounting Versus Economic Earnings • Economic earnings – Sustainable cash flow that can be paid to stockholders without impairing productive capacity of the firm • Accounting earnings – Affected by conventions regarding the valuation of assets INVESTMENTS | BODIE, KANE, MARCUS 19-8 Profitability Measures • ROE measures profitability for contributors of equity capital – After-tax profit/book value of equity • ROA measures profitability for all contributors of capital – EBIT/total assets INVESTMENTS | BODIE, KANE, MARCUS 19-9 Past vs Future ROE • ROE is a key determinant of earnings growth • Past profitability does not guarantee future profitability • Security values are based on future profits • Expectations of future dividends determine today’s stock value INVESTMENTS | BODIE, KANE, MARCUS 19-10 Financial Leverage and ROE • ROE can differ from ROA because of leverage • Leverage makes ROE more volatile • Let t=tax rate and r=interest rate, then: Debt ROE 1 t ROA ROA r Equity INVESTMENTS | BODIE, KANE, MARCUS 10 19-16 Table 19.6 Ratio Decomposition Analysis for Nodett and Somdett INVESTMENTS | BODIE, KANE, MARCUS 16 19-17 Choosing a Benchmark • Compare the company’s ratios across time • Compare ratios of firms in the same industry • Cross-industry comparisons can be misleading INVESTMENTS | BODIE, KANE, MARCUS 17 19-18 Table 19.7 Differences between Profit Margin and Asset Turnover across Industries INVESTMENTS | BODIE, KANE, MARCUS 18 19-19 Table 19.9 Summary of Key Financial Ratios INVESTMENTS | BODIE, KANE, MARCUS 19 19-20 Table 19.9 Summary of Key Financial Ratios INVESTMENTS | BODIE, KANE, MARCUS 20 19-21 Table 19.9 Summary of Key Financial Ratios INVESTMENTS | BODIE, KANE, MARCUS 21 19-22 Table 19.9 Summary of Key Financial Ratios INVESTMENTS | BODIE, KANE, MARCUS 22 19-23 Table 19.9 Summary of Key Financial Ratios INVESTMENTS | BODIE, KANE, MARCUS 23 19-24 Figure 19.1 DuPont Decomposition for Hewlett-Packard INVESTMENTS | BODIE, KANE, MARCUS 24 19-25 Economic Value Added • EVA is the difference between return on assets (ROA) and the opportunity cost of capital (k), multiplied by the capital invested in the firm • EVA is also called residual income • If ROA > k, value is added to the firm INVESTMENTS | BODIE, KANE, MARCUS 25 19-26 Example 19.4 Wal-Mart • In 2009, Wal-Mart’s cost of capital was 5.9% Its ROA was 9.6% and its capital base was $115 billion • Wal-Mart’s EVA = (0.096-0.059) x $115 billion = $4.25 billion INVESTMENTS | BODIE, KANE, MARCUS 26 19-27 Comparability Problems • Accounting Differences – Inventory Valuation – Depreciation • Inflation and Interest Expense • Fair Value Accounting • Quality of Earnings • International Accounting Conventions INVESTMENTS | BODIE, KANE, MARCUS 27 19-28 International Accounting Differences • Reserves – many other countries allow more flexibility in use of reserves • Depreciation – US allows separate tax and reporting presentations • Intangibles – treatment varies widely INVESTMENTS | BODIE, KANE, MARCUS 28 19-29 Figure 19.2 Adjusted Versus Reported Price-Earnings Ratios INVESTMENTS | BODIE, KANE, MARCUS 29 19-30 The Graham Technique • Rules for stock selection: – Purchase common stocks at less than their working-capital value – Give no weight to plant or other fixed assets – Deduct all liabilities in full from assets INVESTMENTS | BODIE, KANE, MARCUS 30 ... 1 9-3 Financial Statements • Income Statement: – Profitability over time • Balance Sheet: – Financial condition at a point in time • Statement of Cash Flows: – Tracks the cash implications of. ..1 9-2 Financial Statement Analysis • Financial statement analysis can be used to discover mispriced securities • Financial accounting data are widely available,... function of the debt-to-equity ratio INVESTMENTS | BODIE, KANE, MARCUS 11 1 9-1 2 Table 19.5 Impact of Financial Leverage on ROE INVESTMENTS | BODIE, KANE, MARCUS 12 1 9-1 3 Decomposition of ROE DuPont