onInvestedCapital(財務報表分析,臺灣中興大學)

8CHAPTERReturnonInvestedCapitalMcGraw-Hill/Irwin?2004TheMcGraw-HillCompanies,Inc.,AllRightsReserved.? Jointanalysisiswhereonemeasureis assessedrelativetoanother? Returnoninvestedcapital(ROI)isanimportant jointanalysisReturnonInvestedCapitalImportanceofJointAnalysisReturnonInvestedCapital

ROIRelationROIrelatesincome,orotherperformancemeasure,toacompany’slevelandsourceoffinancingROIallowscomparisonswithalternativeinvestmentopportunitiesRiskierinvestmentsareexpectedtoyieldahigherROIROIimpactsacompany’sabilitytosucceed,attractfinancing,repaycreditors,andrewardownersReturnonInvestedCapitalApplicationofROI(1)

evaluatingmanagerialeffective-ness(2)assessingprofitability(3)earningsforecasting(4)planningandcontrolROIisapplicableto:ReturnonInvestedCapitalEvaluatingManagerialEffectiveness? Managementis responsibleforall companyactivities? ROIisameasureofmanagerial effectivenessinbusinessactivities? ROIdependsontheskill,resourcefulness, ingenuity,andmotivationofmanagementReturnonInvestedCapitalMeasuringProfitability? ROIisanindicatorofcompany profitability? ROIrelateskeysummary measures:profitswithfinancing?ROIconveysreturnoninvested capitalfromdifferentfinancingperspectivesReturnonInvestedCapitalAssistsinForecastingEarnings? ROIlinkspast,current,andforecastedearningswith investedcapital? ROIaddsdiscipline toforecasting? ROIhelpsidentify optimisticorpessimistic forecasts? ROIaidsinevaluatingpriorforecastperformanceReturnonInvestedCapitalForPlanningandControlROIassistsmanagerswith:? Planning? Budgeting? Coordinatingactivities? Evaluatingopportunities? ControlComponentsofROIDefinitionReturnoninvestedcapitalisdefinedas:ComponentsofROIInvestedCapitalDefined? Nouniversalmeasure ofinvestedcapital exists? Differentmeasuresof investedcapitalreflect differentfinanciers’ perspectivesComponentsofROIAlternativeMeasuresofInvestedCapitalFiveCommonMeasures:? TotalAssets? Long-TermDebtPlusEquity? Equity? MarketValueofInvestedCapital? InvestorInvestedCapitalComponentsofROITotalAssets? Perspectiveisthatofitstotal financingbase? Calledreturnonassets(ROA)ROA:

measuresoperatingefficiency/performance

reflectsreturnfromallfinancing

doesnotdistinguishreturnby financingsourcesComponentsofROITotalAssetsSomeadjustthisinvestedcapitalbasefor:1.UnproductiveAssets2.IntangibleAssets3.AccumulatedDepreciationComponentsofROITotalAssetsUnproductiveAssetAdjustment?Assumesmanagementnotresponsiblefor earningareturnoncapitalnotinoperations? Excludesidleplant,facilitiesunder construction,surplusplant,surplus inventories,surpluscash,anddeferred chargesfrominvestedcapitalAdjustmentisnotvalidasitfailsto:

recognizethatmanagementhasdiscretion overallinvestment

assessoverallmanagementeffectivenessComponentsofROITotalAssetsIntangibleAssetAdjustment?Assumesskepticismofintangibleasset values? Excludesintangibleassetsfrom investedcapitalAdjustmentisnotvalidas:

Lackofinformationorincreased uncertaintydoesnotjustifyexclusionComponentsofROITotalAssetsAccumulatedDepreciationAdjustment? Assumesplantassetsmaintainedinprime condition? Assumesinappropriatetoassessreturnrelativetonetassets? Concernwithadecreasinginvestedcapital base? Includesanaddbackforaccumulateddepreciationon depreciableassetsAdjustmentisnotvalidas:

ROAanalysisfocusesontheperformance oftheentirecompany

Itisinconsistentwithcomputationofincomenetof depreciationexpense

Acquisitionsofnewdepreciableassetsoffsetadeclining capitalbase

Itfailstorecognizeincreasedmaintenancecostsasassets ageComponentsofROILong-TermDebtPlusEquityCapital? Perspectiveisthatofthetwomain suppliersoflong-termfinancing—long-termcreditorsandequityshareholders? Referredtoaslong-term capitalization

?Excludescurrentliability financingComponentsofROIEquityCapital?Perspectiveisthatofequity holders?Capturestheeffectofleverage (debt)capitalonequityholder return?Excludesalldebtfinancingand preferredequityComponentsofROIMarketValueofInvestedCapital? Assumescertainassetsnot recognizedinfinancialstatements?Usesthemarketvalueofinvested capital(debtandequity)ComponentsofROIInvestorInvestedCapital? Perspectiveisthatoftheindividual investor?Focusisonindividualshareholder,not thecompany? Usesthepurchasepriceofsecuritiesas investedcapitalComponentsofROIComputingInvestedCapital? Usuallycomputedusingaverage capitalavailablefortheperiod? Typicallyaddbeginningand endinginvestedcapitalamounts anddivideby2?Moreaccuratecomputationisto averageinterimamounts —quarterlyormonthlyComponentsofROIIncomeDefined? Definitionofincome(return)dependsondefinitionofinvested capital? Measuresofincomeincomputingreturnoninvestedcapitalmust reflectallapplicableexpensesfromtheperspectiveofthecapital contributors? Incometaxesarevaliddeductionsincomputingincomeforreturn oninvestedcapitalExamples:? Returnontotalassetscapitalusesincomebefore

interest

expenseanddividends? Returnonlong-termdebtplusequitycapitalusesincomebefore interestexpenseanddividends? Returnoncommonequitycapitalusesnetincomeafter deductionsforinterestandpreferreddividendsComponentsofROIAdjustmentstoInvestedCapitalandIncomeNumbersManyaccountingnumbersrequireanalyticaladjustment—seepriorchaptersSomenumbersnotreportedinfinancialstatementsneedtobeincludedSuchadjustmentsarenecessaryforeffectiveanalysisofreturnoninvestedcapitalComponentsofROIReturnonAssets--ROAComponentsofROIReturnonLong-TermDebtplusEquity[Alsocalledreturnonlong-termcapitalization]ComponentsofROIReturnonCommonEquity--ROCENetincome-PreferreddividendsTotalcommonshareholders’equity[WhenROCEishigherthanROA,itoftenreflectsfavorableimpactsofleverage]ROCEisapproximatedbyBasicearningspershareBookvaluepershareAnalyzingReturnonAssets--ROADisaggregatingROAProfitmargin:measuresprofitabilityrelativetosaleAssetturnover(utilization):measureseffectivenessingeneratingsalesfromassetsReturnonassets=ProfitmarginxAssetturnoverAnalyzingReturnonAssets--ROARelationBetweenProfitMarginandAssetTurnoverProfitmarginandassetturnoverareinterdependentADEGFHIBCYKJLNPXMOAnalyzingReturnonAssets--ROARelationBetweenProfitMarginandAssetTurnoverROA=5%FoodStoresAgricultureAmusementsHealthServicesMetalsPetroleumAirTransportationPaperBuildingMaterialsConstructionChemicalsFisheriesTobaccoOil&GasHotelsMuseumsRealEstateAutoDealersWholesaleTradeBuildersWholesale-NondurablesTransportationServiceAnalyzingReturnonAssets--ROAAssetTurnoverAnalysis? Assetturnovermeasuresthe intensitywithwhichcompaniesutilize assets? Relevantmeasureisthe amountofsales generatedSalestoCash:

Reflectstrade-offbetweenliquidityandaccumulationoflow-returnfundsSalestoReceivables:

Reflectstrade-offbetweenincreasedsalesandaccumulationoffundsinreceivablesSalestoInventories:

Reflectstrade-offbetweenfundsaccumulatedininventoryandthepotentiallossofcurrentandfuturesalesSalestoFixedAssets:

Reflectstrade-offbetweenfixedassetinvestmentshavinghighbreak-evenpointsandinvestmentsinmoreefficient,productiveassetswithhighsalespotentialSalestoOtherAssets:

Reflectstrade-offbetweenassetsheldforcurrentandfuturesalesandaccumulationoffundsinhigherriskassetsSalestoCurrentLiabilities:

ReflectsarelationbetweensalesandcurrenttradeliabilitiesAnalyzingReturnonAssets--ROADisaggregatingAssetturnoverAnalyzingReturnonCommonEquity--ROCERoleinEquityValuationwhereROCEisequaltonetincomeavailabletocommonshareholders(afterprefereddiviends)dividedbythebeginning-of-periodcommonequityThiscanberestatedintermsoffutureROCE:AnalyzingReturnonCommonEquity--ROCEDisaggregatingROCE? Adjustedprofitmargin:portionofeachsalesdollarremainingforcommon shareholdersafterprovidingforallcostsandclaims(includingpreferred dividends)? Asset

turnover(utilization):measureseffectivenessingeneratingsalesfrom assets? Leverage*:measurestheproportionofassetsfinancedbycommon shareholders*Alsocalledfinancialleverageandcommonleverage.ROCE

=Adjustedprofitmargin×Assetturnover×LeverageAdjustedprofitmargin=Pre-taxadjustedprofitmarginxRetentionrateAnalyzingReturnonCommonEquity--ROCEFurtherDisaggregationofAdjustedProfitMarginPre-taxadjustedprofitmargin:measureofoperatingeffectivenessRetentionrate:measureoftax-managementeffectiveness

ROCE=[(EBITprofitmargin×Assetturnover)–Interestburden]×Leverage×Retentionrate? EBITisearnings(income)beforeinterestandtaxes(and beforeanypreferreddividends)? EBITprofitmarginisEBITdividedbysales? Interestburdenisinterestexpensedividedbyaverage assetsThisdisaggregationhighlightseffectsofbothinterestandtaxesonROCEAnalyzingReturnonCom