financialperformance財務(wù)分析1課件

financialperformance財務(wù)分析2024/1/6financialperformance財務(wù)分析[1]Whatismeantbyinterpretation?

Lookingattheaccountsandthenotestotheaccounts–astheyareMakingafewsimplecalculationsMakinginformedjudgementsfinancialperformance財務(wù)分析[1]APPRAISALOFACCOUNTS1.

Profitability

-theabilityofafirmtouseitsassetbaseinordertoincreasethetotalassets.2.

Solvency/Liquidity-Thisreferstotheabilityofafirmtopayoffitsshort-termdebts3.

Efficiency

-theefficiencywithwhichthefirmmanagesitscurrentassetsandcurrentliabilities4.Capitalstructure-Thisassesstheabilitytomeetlong-termfinancialobligations.financialperformance財務(wù)分析[1]RATIO

ANALYSIS?

COMPARATIVES

ARE

HELPFUL

–

WITH

PREVIOUS

YEARS

–

WITH

BUDGETS

&

FORECASTS

–

WITH

SIMILAR

COMPANIES

–

WITH

MACRO

ECONOMIC

CONDITIONS5financialperformance財務(wù)分析[1]Example

1:

Cross

sectional

comparison1.

Comparisons

between

entities

–

which

of

the

following

companies

is

the

most

profitable?ProfitNet

assetsCo.

A￡’000

200

500

Co.

B

￡’000

1,00010,0003Return40%10%financialperformance財務(wù)分析[1]

Example

2:

Time

series

comparison2.Has

there

been

an

increase

or

decrease

inprofitability

from

one

year

to

the

next?ProfitNet

assetsPrevious

year

￡’000

900

8,000Current

year

￡’000

1,00010,0004Return11.25%10%financialperformance財務(wù)分析[1]Profitability?

RETURN

ON

CAPITAL

EMPLOYED

(ROCE)

Generally

some

sort

of

measure

of

profit

as

a

percentage

of

capital

in

a

business:?

R.O.

C.E.

=

PROFIT

BEFORE

INTEREST

AND

TAX

/

TOTAL

ASSETS

-

CURRENT

LIAB.6financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&Liabilities12,000OrdinarysharesPreferenceshares1,00019,692Retainedearnings32,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ROCE=4380/33246=13.2%ROCE

EXAMPLE8financialperformance財務(wù)分析[1]ProfitabilityPROFIT

MARGINSGenerally

some

sort

of

%

measure

of

profit

from

activity.GROSS

PROFIT

MARGIN

(%)

=

GROSS

PROFIT

/

SALESNET

PROFIT

MARGIN

(%)

=

OPERATING

PROFIT

(PBIT)

/

SALES10financialperformance財務(wù)分析[1]GrossProfitPercentageFactorsnegativelyaffectingthisratio:Adecreaseinsales.Anincreaseinthepurchasingprice(perhapsasaresultofchangingsupplierornottakingadvantageofdiscounts)Achangeinthesellingpriceoreffectsofcompetition(insomecasescompaniesmarkdownthepriceinordertodisposeofslowmovingorobsoletestock).financialperformance財務(wù)分析[1]GrossProfitPercentageFactorsnegativelyaffectingthisratio:AchangeinthesalesmixwherelineswhicharenotasprofitablearebeingcarriedAnincreaseinshrinkage–i.e.stocklossesresultingfromwastage,breakagesortheftfinancialperformance財務(wù)分析[1]NetprofitmarginThisratioshowshowprofitableabusinessisafterallexpenseshavebeentakenintoaccount.Changes:1.Costofsalesincreased2.Administrativeexpensesanddistributioncostsincreased3.Salesstrategyfinancialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450EXAMPLE11financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450GPmargin=12400/34800=35.6%GP

MARGIN

EXAMPLE12financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450GPmargin=4380/34800=12.6%NP

MARGIN

EXAMPLE13financialperformance財務(wù)分析[1]

LIQUIDITYRATIOS?

‘Liquidity’

refers

to

the

ability

of

a

business

to

generate

sufficient

cash

to

pay

its

liabilities

as

they

fall

due

for

payment.?

It

is

linked

directly

to

the

short-term

solvency

of

a

business.?

A

business

goes

bust

when

it

cannot

pay

its

debts

(it

becomes

insolvent).19financialperformance財務(wù)分析[1]CURRENTRATIO?

=

TOTAL

CURRENT

ASSETS

/

TOTAL

CURRENT

LIABILITIES?

RELEVANCE

TO

CASH

FLOW?

GUIDE

TO

ADEQUACY

–

a

magic

figure?

–

depends

on

realisation

of

stock

and

collection

of

debtors.21financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450CR=6250/2459=2.54CURRENTRATIOEXAMPLE22financialperformance財務(wù)分析[1]

FACTORSNEGATIVELYAFFECTINGTHISRATIO:Adecreaseincurrentassets(eitherstock,debtors,bankorcash)forinstance,currentassetsmayhavebeenusedtobuynewfixedassetsorrepaydebenturesAnincreaseincurrentliabilities(eithercreditorsorbankoverdraft)Whenassessingboththecurrentandthequickratios,lookattheinformationprovidedwithinthequestiontoconsiderwhetherornotthecompanyisoverdrawnattheyear-endfinancialperformance財務(wù)分析[1]

LIQUIDITYRATIO (AcidtestratioorQuickratio)=

CURRENT

ASSETS

EXCLUDING

STOCK

/

CURRENT

LIABILITIES?

RELEVANCE

TO

CASH

FLOW?

GUIDE

TO

ADEQUACY

–

a

magic

figure?

–

may

be

excessively

prudent

as

not

all

current

liabilities

are

due

for

immediate

payment.23financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets(stock2848)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets(stock2848)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450LR=(6250–2848)/2459=1.4LIQUIDITYRATIOEXAMPLE24financialperformance財務(wù)分析[1]Solvencyingeneral

ManyprofitablefirmsbecomeinsolventGeneralruleofthumb:currentratioshouldbeatleast1.5:1Acidtestratioshouldbeatleast1:1Widevariationsoverdifferentindustriesfinancialperformance財務(wù)分析[1]Efficiency?ASSETTURNOVER –Generallysomemeasureofwhatsalesweget fromsomecategoryofassetse.g.tosee“howhardtheassetsarebeingworked”?

TOTAL

ASSET

TURNOVER

(ratio)

–

SALES

/

TOTAL

ASSETS

:

1?

NET

ASSET

TURNOVER

(ratio)

–

SALES

/

(TOTAL

ASSETS

–

TOTAL

LIABILITIES)

:

114financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450EXAMPLE15financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450TATurnover=34800/35705=0.97TATURNOVEREXAMPLE16financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450NATurnover=24800/326921.06NATURNOVEREXAMPLE17financialperformance財務(wù)分析[1]

INVENTORYDAYS(TOSELL)?Inventoryturnover=

costofsales/averageinventory?Daystosellinventory=

(averageinventory/

costofsales)

x

365

days?

GUIDE

TO

ADEQUACY

–

no

magic

number

–

consider

type

of

business

and

previous

years25financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets(stock2848)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets(stock2848)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450Inv=2848/22400*365=46daysINVENTORYDAYSEXAMPLE26financialperformance財務(wù)分析[1]INVENTORY

DAYSAshortertimeofinventoryperiodisrepresents:1.ahealthysignasitindicatesthatthecompanyisbuyingmorestock,mostprobablyasaresultofsellingmore.(generally)2.anunhealthysignasitcansometimesbearesultofpoorstockcontrol.Thecompanymaybebuyingmorestockasaresultofstockbeingdamaged,lost,stolenorwasted.(sometimes)Todeterminewhichoftheaboveexplanationsisfitting,theaccountantmustcomparethepercentageincreaseincostofgoodssoldwiththepercentageincreaseinsalesfinancialperformance財務(wù)分析[1]

DEBTORS(orRECEIVABLES)COLLECTIONPERIOD=

(tradedebtors/

creditsales)

x

365

days?

GUIDE

TO

ADEQUACY

–

depends

upon

terms

of

trade

–

compare

with

previous

years

–

problem

of

identification

of

valid

figures

for

debtors

&

sales27financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets(debtors3262)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets(debtors3262)6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450DCP=3262/34800*36534daysDEBTORS’COLLECTIONEXAMPLE28financialperformance財務(wù)分析[1]

FACTORSNEGATIVELYAFFECTINGTHISRATIO:LongerpaymentperiodofferedtoencourageanincreaseinsalesPoorcreditcontrolPoorinvoicingsystemPoorremindersystemLackofincentivesofferedtocustomers(i.e.Cashdiscounts)Increaseinbaddebts.financialperformance財務(wù)分析[1]

CREDITOR(orPAYABLES)PAYMENTPERIOD=

(tradecreditors/

creditpurchase)

x

365

days?

NB.,

when

purchases

figure

is

not

available,

use

cost

of

sales

as

a

proxy?

GUIDE

TO

ADEQUACY

–

depends

upon

terms

of

trade

–

compare

with

previous

years

–

problem

of

identification

of

valid

figures

for

creditors

&

purchases29financialperformance財務(wù)分析[1]INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450ABC

PLC7BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities(Creditors￡1607)2,459TotalEquity&Liabilities35,705financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,250TotalAssets35,705Equity&LiabilitiesOrdinaryshares12,000Preferenceshares1,000Retainedearnings19,69232,692Less:non-currentliabilities554Less:currentliabilities(Creditors￡1607)2,459TotalEquity&Liabilities35,705INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450CPP=1607/22400*365=26daysCREDITORPAYMENTPERIOD30financialperformance財務(wù)分析[1]Factorsnegativelyaffectingthisratio:Paymentperiodmayhaveincreasedforpositivereasons,forinstancemorefavourablepaymentstermsofferedbysuppliersSuppliersdonothaveaneffectiveinvoicingorremindersystemAlongerperiodmeansthancompaniescanholdontoitsmoneyforlongerHowever,alongpaymentperiodmayindicate:Poorcashflowposition.HurtrelationswithsuppliersDiscountsmaylossfinancialperformance財務(wù)分析[1]Capitalstructure?

All

investments

carry

risk.?

we

looked

at

short-term

solvencyas

a

business

cannot

continue

if

it

is

unable

topay

its

debts

as

they

fall

due.?

Here

we

look

at

the

medium-term

capitalstructure

of

a

business

and

see

how

this

isrelated

to

the

potential

of

risk

to

the

equityshareholder

(and

the

business

in

general).13financialperformance財務(wù)分析[1]Capitalstructure?

CAPITAL

GEARING:(Long-termdebtx100％)/Allfinance*

?

BENEFITS

OF

DEBT?

DISADVANTAGES

OF

DEBT14financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,25035,705Less:currentliabilities2,45933,246Less:non-currentliabilities554Netassets32,692Ordinaryshares12,000Preferenceshares1,000Retainedearnings19,96232,692INCOMESTATEMENT￡000Salesrevenue34,800Costofsales22,400GrossProfit12,400Operatingexpenses8,020Operatingprofit4,380Interestpaid40Profitbeforetax4,340Taxation890Profitaftertax3,450EXAMPLEXYZ15financialperformance財務(wù)分析[1]BALANCESHEET￡000Non-currentassets29,455Currentassets6,25035,705Less:currentliabilities2,45933,246Less:non-currentliabilities554Netassets32,692Ordinaryshares12,000Preferenceshares1,000Retainedearnings19,96232,692GEARINGEXAMPLELong-term

loanDeferred

taxation500

5416financialperformance財務(wù)分析[1]4.5%BALANCESHEET￡000Non-currentassets29,455Currentassets6,25035,705Less:currentliabilities2,45933,246Less:non-currentliabilities554Netassets32,692Ordinaryshares12,000Preferenceshares1,000Retainedearnings19,96232,692

GEARINGEXAMPLEEQUITY

FINANCENON-EQUITY

FINANCELong-term

loanDeferred

taxationGearing(%)

=1500/33462

500

5417financialperformance財務(wù)分析[1]

GEARINGANDINCOME?

EFFECT

OF

INCREASED

/

DECREASED

PROFITS

ON

HIGH

/

LOW

GEARED

COMPANIES.?

HIGH

GEARING

IMPLIES

GREATER

RISK?

LINKING

FIXED

AND

VARIABLE

OPERATING

COSTS

TO

GEARING.18financialperformance財務(wù)分析[1]A(GoodYear)A(PoorYear)B(GoodYear)A(PoorYear)Sharecapital100,000100,00010,00010,000Debt10,00010,000100,000100,000110,000110,000110,000110,000Operatingprofit64,000Interestcharge1,500Profitforequity62,500E.P.S.62.5p

THEIMPACTOFGEARINGCoA(lowgeared)andCo.B(highgeared)20financialperformance財務(wù)分析[1]A(GoodYear)A(PoorYear)B(GoodYear)B(PoorYear)Sharecapital100,000100,00010,00010,000Debt10,00010,0