Chapter 4 Learning Objectives

Presentation on theme: "Chapter 4 Learning Objectives"— Presentation transcript:

1 Chapter 4 Learning Objectives
1 Calculate and interpret the market value and market value added of a public corporation. 2 Calculate and interpret key measures of financial performance, including economic value added (EVA) and rates of return on capital, assets, and equity. 3 Calculate and interpret key measures of operating efficiency, leverage, and liquidity. 4 Show how profitability depends on the efficient use of assets and on profits as a fraction of sales. 5 Understand how a company’s sustainable growth depends on both its payout policy and its return to equity. 6 Compare a company’s financial standing with its competitors and its own position in previous years.

2 公司的績效 求算 : 基礎資料 : 公司的績效 財務比率 公司財務和市場價值
Chapter 4 Outline Corporate Performance Measured Market Value Added Economic Value Added Book Rates of Return: Return on Capital, Return on Assets, Return on Equity Financial Ratios Assessing the Investment Decisions: Measuring Efficiency, Measuring Profitability Assessing the Financing Decisions: Measuring Leverage, Measuring Liquidity The Du Pont System Calculating Sustainable Growth The Role of Financial Ratios and Transparency Basic idea of this chapter: The financials (balance sheet, income statement) and market values act as the foundation. Financial ratios are the building block that help diagnose corporate performance. 2 2 2 3 2 2

3 Three Primary Ways to Measure Corporate Performance:
公司績效的衡量 公司的 績效 市場附加價值 帳面 報酬率 經濟附加價值 Three Primary Ways to Measure Corporate Performance: Market Value Add: Market capitalization minus book value of equity. Economic Value Add: Operating income minus a charge for the cost of capital employed. Also called residual income. Book Rates of Return: Measure the firm’s profits per dollar of assets. Also known as accounting rates of return because they are based on accounting information (specifically company financials). Three common measures are the return on capital (ROC), the return on equity (ROE), and the return on assets (ROA).

4 市場附加價值 這是什麼？ 為什麼有用？ 定義 : Definitions:
Market Capitalization —Total market value of equity, equal to share price times the number of shares outstanding Market Value Added —Market Capitalization – Book Value of Equity

5 思考 AT&T公司和 Home Depot公司 相似的 MVA，不同的市價對帳面價值比率 為什麼？
Market Capitalization = Total market value of equity, equal to share price times the number of shares outstanding Market Value Added = Market Capitalization – Book Value of Equity (i.e. does the market believe the firm’s value exceeds its book value) Market-to-Book Ratio = (Market Value of Equity)/(Book Value of Equity) Limitations of MVA: 1. Market value reflects investors’ expectations about future performance, complete with the imprecisions that come with all forecasting. 2. Market value fluctuates frequently due to reasons outside of the financial managers control. 3. Privately owned corporations do not have a public market value. 思考 AT&T公司和 Home Depot公司 相似的 MVA，不同的市價對帳面價值比率 為什麼？

6 經濟附加價值 這是什麼？ 為什麼重要？ 為什麼稱為 residual income? 定義 :
Economic Value Added = Operating Income minus the product of cost of capital and total capitalization Operating Income = Net Income + After-tax Interest Cost of Capital = The minimum acceptable rate of return on capital investment Total Capitalization = Total Long-term Capital = Equity + Bonds + other Long-term capital [all capital committed by debt and equity investors] 定義 : * 營業淨利 = 稅後淨利 + 稅後利息 ; ROC = 資本報酬率

7 思考 Coca-Cola公司和 Google公司 相似的EVA，不同的資本報酬率 為什麼？
Economic Value Added = Operating Income minus the product of cost of capital and total capitalization Operating Income = Net Income + After-tax Interest Cost of Capital = The minimum acceptable rate of return on capital investment Total Capitalization = Total long-term capital = Equity + Bonds + Other Long-term Capital [all capital committed by debt and equity investors] Return on Capital = (Operating Income)/(Total Capitalization) 思考 Coca-Cola公司和 Google公司 相似的EVA，不同的資本報酬率 為什麼？

8 帳面報酬率* 衡量的是什麼？ 資本報酬率 Return on Capital, ROC
資產報酬率 Return on Assets, ROA Book Rates of Return = Accounting Rates of Return = Measures of the firm’s profits per dollar of assets. Return on Capital = (after-tax operating income)/(total capitalization) Return on Assets = (after-tax operating income)/(average total assets) or = (after-tax operating income)/(start of year total assets) Return on Equity = (net income)/(average equity) or = (net income)/(start of year equity) Average Assets = (end of period assets + beginning of period assets)/2 Average Equity = (end of period equity + beginning of period equity)/2 權益報酬率 Return on Equity, ROE *帳面報酬率也稱為會計報酬率

9 求算資本報酬率 ROC Lowe’s 公司的資本報酬率 Lowe’s 公司的資產負債表 ($百萬)
Return on Capital = Net income plus after tax interest (this sum is known as operating income) as a percentage of long-term capital (known as total capitalization) Average Total Capitalization = The average of the beginning and end of year value of equity and long-term debt

10 求算資產報酬率 ROA Lowe’s 公司的資產報酬率 Lowe’s 公司的資產負債表 ($百萬)
Return on Assets = Net income plus after-tax interest (this sum is known as operating income) as a percentage of (average) total assets

11 求算權益報酬率 ROE Lowe’s 公司的權益報酬率 Lowe’s 公司的資產負債表 ($百萬)
Return on Equity = Net income as a percentage of average total equity

12 財務比率和股東的價值 股東的價值有賴良好的投資決策和融資決策 財務比率協助衡量這些決策的成功和適宜 股東的價值 投資決策 效率性比率
獲利性比率 融資決策 槓桿比率 流動性比率 股東的價值有賴良好的投資決策和融資決策 財務比率協助衡量這些決策的成功和適宜 Investment Decision – The allocation of limited resources among competing opportunities (projects) through the capital budgeting process. Financing Decision — The form and amount of financing of a firm’s investments. 2 2 2 3 2 2

13 效率性比率 或* 此一比率如何衡量效率性？ 此一比率如何衡量效率性？
Efficiency Ratios – Ratios which measure how efficiently a firm uses its assets. * 兩個公式都是求算資產週轉率的合法方式 7

14 效率性比率 此一比率如何衡量效率性？ 此一比率如何衡量效率性？ 此一比率如何衡量效率性？
Efficiency Ratios – Ratios which measure how efficiently a firm uses its assets. 此一比率如何衡量效率性？ 7

15 求算效率性比率 Lowe’s 公司的資產負債表 ($百萬) Lowe’s 公司的資產週轉率

16 獲利性比率 此一比率如何衡量公司的獲利性？ 此一比率何時比只使用利潤邊際更加有用？
Profitability Ratio — Measures the profits generated from sales. Note: ROC, ROA, ROA and EVA are also typically considered profitability ratios. 說明 : ROC, ROA、ROE 和 EVA 通常也都視為獲利性比率 3

17 求算獲利性比率 Lowe’s 公司的資產負債表 ($百萬) Lowe’s 公司的營業利潤邊際

18 槓桿比率 此一比率如何衡量槓桿？ 此一比率如何衡量槓桿？
Leverage Ratios – Measures the extent to which a firm is funded by debt 此一比率如何衡量槓桿？ 3

19 衡量槓桿 此一比率如何衡量槓桿？ 此一比率如何衡量槓桿？ 此一比率如何衡量槓桿？ 4

20 求算槓桿比率 Lowe’s 公司的利息賺得倍數 Lowe’s 公司的資產負債表 ($百萬)
Note: COGS stands for Cost of Goods Sold. Expenses include selling, general and administrative costs (and “store operating costs” in this example).

21 衡量流動性 此一比率如何衡量流動性？ 此一比率如何衡量流動性？
Liquidity Ratios– Ratios which measure the extent to which the firm has sufficient liquidity in the coming year. Net Working Capital = Current Assets – Current Liabilities 5

22 流動性比率 此一比率如何不同於流動比率？為什麼財務經理人比較偏好他？ 此一比率如何不同於流動比率？為什麼財務經理人比較偏好他？
The Quick Ratio is sometimes referred to as the Acid-Test Ratio 6

23 Lowe’s 公司的淨營運資金對資產總額比率
求算流動性比率 Lowe’s 公司的資產負債表 ($百萬) Lowe’s 公司的淨營運資金對資產總額比率

24 杜邦系統 這是什麼？有什麼作用？ DuPont System: A breakdown of ROE and ROA into component ratios 13

25 杜邦系統 : ROA 資產週轉率 營業利潤邊際 15

26 ROA 產業拆解 Discussion: For a given level of ROA, which firms have returns driven by turnover? By margin?

27 杜邦系統 : ROE 槓桿比率 債務負荷 營業利潤邊際 資產週轉率
The last ratio in the DuPont breakdown of ROE is a measure of the firm’s debt burden. The denominator represents free cash flow (Cash available for distribution to investors after the company has paid for any new capital investment or additions to working capital.). If the ratio is close to zero, the firm has a heavy debt burden—much of its free cash flow goes to interest payments. 17

28 維持成長率 Definitions: Growth in Equity from Plowback = Sustainable Growth = Growth that relies only on internal financing, keeping the long-term debt ratio constant. Plowback Ratio + Payout Ratio = 1 (always) Payout Ratio– The percent of each dollar earned that is paid to shareholders. Plowback Ratio– The percent of each dollar earned that is retained by the corporation. 10

29 財務比率的角色 可比較性 Discussion: after we have made all of these calculations, how do we know if the results are good or bad? Financial ratios can be used for: 1. Self comparison (or trend analysis)-- is the company improving over its past performance? 2. Peer group comparison -- how is the company doing compared to peer companies? (in this case, Home Depot vs. Lowe’s) 3. Best practice -- how does the company compare to "best of breed" companies regardless of industry? The most important role that ratio analysis plays is diagnostic. Ratio analysis points out areas of strengths and weaknesses in corporate performance. When an organization has an intense understanding of the operating processes that contribute to financial statement numbers, corrective action can be identified and hopefully implemented in a fairly short time frame. This is much like the medical doctor interpreting the results from a series of lab reports and recommending a course of action to correct the medical problem. Notes: Discrepancies between calculations here and in previous slides are from rounding. Some measures can be calculated using average values or year beginning values.

30 財務比率的角色 透明度

31 附錄 A : 平均比率 (產業分類)

32 附錄 B : 財務比率和違約風險