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1、 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Analysis of Financial StatementsRatio Analysis DuPont Equation Effects of Improving Ratios Limitations of Ratio Analysis Qualitative FactorsChapter
2、44-1 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Balance Sheet: Assets4-2Cash A/R Inventories Total CA Gross FA Less: Deprec. Net FA Total Assets2012 7,282 632,160 1,287,360 1,926,802 1,202,950
3、263,160939,790 2,866,5922013E 85,632 878,000 1,716,480 2,680,112 1,197,160380,120817,040 3,497,152 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Balance Sheet: Liabilities and Equity4-3Accts paya
4、ble Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L & E2012 524,160 636,808489,600 1,650,568 723,432 460,00032,592492,592 2,866,5922013E 436,800 300,000408,000 1,144,800 400,000 1,721,176231,176 1,952,352 3,497,152 2013 Cengage Learning. All Rights
5、Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Income StatementSales COGS Other expenses EBITDA Deprec. & amort. EBIT Interest exp. EBT Taxes Net income4-42012 6,034,000 5,528,000519,988(13,988)116,960(130,948)136,012(266,960)(106
6、,784)(160,176)2013E 7,035,6005,875,992550,000 609,608116,960 492,64870,008 422,640169,056253,584 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Other Data4-5No. of shares EPS DPS Stock price Lease
7、 pmts2013E 250,000 $1.014 $0.220 $12.17 $40,0002012 100,000 -$1.602 $0.110 $2.25 $40,000 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Why are ratios useful?Ratios standardize numbers and facilit
8、ate comparisons. Ratios are used to highlight weaknesses and strengths. Ratio comparisons should be made through time and with competitors. Trend analysis Industry analysis Benchmark (peer) analysis4-6 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted t
9、o a publicly accessible website, in whole or in part.Five Major Categories of Ratios and the Questions They AnswerLiquidity: Can we make required payments? Asset management: Right amount of assets vs. sales? Debt management: Right mix of debt and equity? Profitability: Do sales prices exceed unit co
10、sts, and are sales high enough as reflected in PM, ROE, and ROA? Market value: Do investors like what they see as reflected in P/E and M/B ratios?4-7 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part
11、.DLeons Forecasted Current Ratio and Quick Ratio for 20134-8 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Comments on Liquidity Ratios2013E20122011Ind.Current ratio2.34x1.20x2.30x2.70xQuick rati
12、o0.84x0.39x0.85x1.00x4-9Expected to improve but still below the industry average. Liquidity position is weak. 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.DLeons Inventory Turnover vs. the Indus
13、try Average2013E20122011Ind.Inventory turnover4.1x4.70x4.8x6.1x4-10Inv. turnover = Sales/Inventories = $7,036/$1,716 = 4.10x 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Comments on Inventory Tu
14、rnoverInventory turnover is below industry average. DLeon might have old inventory, or its control might be poor. No improvement is currently forecasted.4-11 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or
15、 in part.DSO: Average Number of Days after Making a Sale before Receiving CashDSO = Receivables/Avg. sales per day= Receivables/(Annual sales/365)= $878/($7,036/365)= 45.6 days4-12 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessib
16、le website, in whole or in part.Appraisal of DSO2013E20122011Ind.DSO45.638.237.432.04-13DLeon collects on sales too slowly, and is getting worse. DLeon has a poor credit policy. 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part.Fixed Assets and Total Assets Turnover Ratios vs. the Industry AverageFA turnover = Sales/Net fixed assets= $7,036/$
