财务管理.docx

Chapter 4Financial Planning and ForecastingDefinitions about budgeting and percent of sales methodto predict the future assets/liabilities according to the relationship between the present sales revenue and assets/liabilities . DFN (Discretionary financing needs) / AFN (Additional funds needed).1. Budget (put things in Perspective) is a quantitative expression of a plan of action that helps managers coordinate and implement the plan .(1)comprehensive budget (全面预算体系) : a set of financial statement and other schedules showing the expected results for a future period .(2)the comprehensive budget is a tool to make planning efficient and also provides a means for monitoring whether activities are going according to plan .It should include : (1)financial budgets: Jpro forma balance sheet ;Jcash budget;Jpro forma income statement. (2)operating budgets:Jproduction schedules;Jpurchasing schedules;Jfixed asset acquisition (capital budgeting) .2. Organization of budget :(1)continuous budget(延续或滚动预算) :Ja budget for a month (or a quarter) will be added as one of these periods goes by . Thus there would be a 12 month budget at all times . Jby preparing continuous budgets ,managers are then kept aware of the needs for the next 12 months ,regardless of the time of the year .(2)static budget(静态预算)(prepared for only on level of volume which is the organizations goal):Jthe static budget is not altered after it is drawn up ,regardless of changes in volume ,sale prices ,or costs . Jthe focus of the static budget is future planning .(3)flexible budget(弹性预算)(a set of budgets covering a range of volume rather than a single volume level . It is also called a variance budget):Jthe flexible budget shows how revenues and costs vary with volume throughout the budget range ;Jthe focus of the flexible budget is evaluating past performance .3.After-tax cash flow =Earnings after taxes + depreciation expense + deferred taxes4.Percent of sales method :permits a company to forecast the amount of financing it will need for a given increase in sales . (1)*/current sales=*% (2)projected sales*%=$ (3)projected sales(net income/sales) 1-(cash dividends/net income)=& (4)discretionary financing needed= projected total assets projected total liabilities projected owners equity5.DFN (Discretionary financing needs): funds that a firm must raise externally through borrowing or by selling new common or preferred stock. EFN(External financing needs): All the firms needs for financing beyond the funds provided internally through the retention of earnings ,thus EFN = Predicted change in total assets predicted change in retained earnings .Chapter 5The Time Value of Money FVn= PV0 (1+i)n= PV0 FVIFi,nCompounded interest PV0= FVn 1/(1+i)n= FVn PVIFi.n FVAn =PMTFVIFAi,n Ordinary annuity PV = PMTPVIFAi,n Annuities due = Annuities(1+i)Annuities Delayed annuity(uneven cash flow streams):先把不均衡的年金加成均等，用普通年金方法算完后，减去多加（加上多减）的钱数的现值。 PV=R/I perpetuity Perpetuity and Growing perpetuity PV=R/i-gGrowing perpetuity ,growth rate=gChapter 6Analysis of Risk and ReturnThe risk and return of one certain asset. . . of two assets. . .of n assets. . .of a risk-freeasset and n risky assetsthe relationship between a risky asset and n risky assetshow todecide the price of a risky asset1. concepts : (1)holding period returnR=Dt + (Pt - Pt-1)/Pt-1 Dividend ending beginning price price (2)expected return :r=E(r) 多个资产时加权平均 (3)=标准差=standard deviation AB=Cov(RA,RB)=E(RAt-E(RA)(RBt-E(RB) p2=XA2A2 + XB2B2 + 2(XAA)(XBB)AB p=portfolio (4)z=r-E(r)/ 即标准化成标准正态分布，z是横轴上的值 (5)v=/E(r) 变异系数 用于比较两种不同规模的投资的风险的时候 (6) 相关系数AB=Corr ( RA,RB)= AB/AB (7)required return=risk-free return +risk premium=real rate of return + expected inflation premium2. the risk and return of two assets (graph)3. The risk and return of n assets & a risk-free asset and n risky assets (graph)efficient frontier capital market line (CML)optimal risky portfolio (CML与efficient frontier的切点)4. the relationship between a risky asset and n risky assets(1)j=Covariancej,m / variancem=jmjm/m2(2)variance and standard deviation in a portfolio of many assets : the variance of the individual assets completely vanish as the number of assets becomes large. However, the covariance terms remain. p2=* (*=all covariances in the table)(3)characteristic line: y=ax+b a=5. how to decide the price of a risky assetCapital Asset Pricing Model (CAPM) : Ri = RF +I (RM RF)Expected return on a security = risk-free rate + beta of the security market risk premiumMajor problems of CAPM : 1. Estimating expected future market returns2.Determiningan appropriate rf 3.Determining the best estimate of 4.Investors don totally ignore unsystematic risk 5.Betas are frequently unstable over time 6.Required returns are determined by macroeconomic factors6. 名词解释：1) CML: capital market line (graph) 2)SML (security market line): the relationship between systematic risk and required rates of return for individual securities .(graph) 3)CAPM (Capital assets pricing model) 4)CL (Characteristic line) (graph)Chapter 7 & 8Valuation of SecuritiesDefinitions of valuecharacteristics of bonds preferred stock and common stockbond valuation1. Definitions of value: liquidation value VS going-concern value(清算价值与持续经营价值) Book value VS market value(账面价值与市场价值) Jbook value = accounting/historic value Jmarket value = normally related to expected future cash flow *market value does not necessarily bear any relationship to book value *market value may be either greater or less than book value Intrinsic value / economic value VS Market value(内在价值/经济价值与市场价值)2. Bonds: 1) Different kinds of bonds Jpure discount bond(无息债券) Jlevel-coupon bonds(普通债券) Jconsols ( perpetual bonds)(永续债券) 2) Features of bonds Jindenture(合同约束) Jcall feature and bond refunding(赎回条款) Jsinking fund(偿债基金条款) Jconvertible(可转换性) Jwarrant(认股权证) Jbond ratings(债券信用评级)Preferred stock: features of preferred stock Jselling price and par value(面值与销售价格) Jadjustable rates(可调整收益率) Jcumulative dividends(可累积)现在没钱，以后会补齐。 Jparticipation(参与盈余分配) Jmaturity(到期日) Jcall feature(可赎回条款) Jvoting rights(投票权)无投票权 Jpreferred stocks claim on assets and income(对公司收益和资产的优先索取权) Jconvertibility(可转换性)Common stock: features of common stock Jresidual claim on income and assets(剩余索取权) Jpreemptive rights(优先认股权) Jlimited liability(有限责任) Jtakeover(接管)或代理proxy Jclosely held corporation/privately owned(紧密持股公司) Jpublicly owned corporation/to be listed(上市公司/公众公司)3. Bond valuation : PV = F / (1+i)npure discount bonds PV = CF / iperpetual bonds (consols) PV = IPVIFAi,n + MPVIFi,nlevel-coupon bondsChapter 9Capital Budgeting and Cash Flow AnalysisPrinciples of estimating cash flowshow to deal with taxes, depreciation, and working capital.1. Principles of estimating cash flows: 1)on an incremental basis if cash flow still exist when project does not exist, then exclude it. 2)on an after tax basis 3)include indirect effectsif new product causes existing customers to demand less of current products, we need to recognize that. 4)exclude sunk costssunk costs are irrelevant 5)opportunity costs of resources2. Estimating the NINV: step 1 cost plus installation and shipping plus step 2 increases in net working capital minus step 3 net proceeds from sale of existing assets plus or minus(高于账面价值时算正outflow) step 4 taxes associated with the above sale equals NINVTax: savings before taxes (profit column)tax rate=$ net cash flow after taxes=savings before taxes (cash flow column) - $Depreciation: increased depreciation expense (profit column), nothing added to the cash flow column.Recovery of net working capital: the total amount of accumulated net working capital is usually recovered at the end of the life of the project.The resulting decrease in net working capital represents an increase in net cash flow.There are generally no tax considerations associated with the recovery of net working capital.Chapter 10 & 11Capital Budgeting: Decision Criteria & Risk Life of the project(EAA) NPV used when two projectsIRR NPV与IRR不一致时”NPV is the king!” are mutually exclusive.PI PB Different initial outlaysIIRR /NPV ( same) Multiple IRRs (现金流有正有负) MIRR used to solve the internal problem of a project.1. Concepts: 1)NPV (net present value):t=1nACFt/1+kt IO(NINV) NPV0 accept NPV0 reject 2)PI (profitability index): PI=t=1nACFt/1+kt IO(NINV) PI1 accept PI1 reject 3)IRR (internal rate of return): t=1nACFt/1+IRRt IO = 0 求出IRR IRRrequired rate of return (贴现率) accept IRRrequired rate of return reject 4)PB (payback period): The payback period is the number of years needed to recover the initial cash outlay.2. Life of the project: A与B两项投资，持续时间不同。 步骤 1，算出两项投资的NPV 2，利用NPV= EAAPVIFAi,n 求出两项投资的EAA 3. NPV与IRR不一致的时候（图）：4. Different initial outlaysDate 0Date 1NPV(25%)IRRA-10m40m22m300%B-25m65m27m160%-15m25mIncremental IRR: ( -15m+25m)/(1+IIRR)=0 求出IIRR=66.67%25% acceptNPV of incremental cash flows: (-15m+25m)/(1+25%)=5m0 acceptAccept project B.5. 现金流有正有负时：MIRRPVout=PVin 把负的现金流都贴到期初，把正的现金流都贴到期末，再把贴到期末的现金流除以(1+MIRR)n，贴回期初，令它与PVout相等，求MIRR。公式：Chapter 12The Cost of Capital Cost of debtvalue of bonds(1-t) Preferred stock发行费用（价格）f=WACC Retained earning Ri = Rf + (Rm Rf) New issued stocks1. Calculating Ka:Ka=We(Ke) + Wd(Ki) + Wp(Kp)1) Ki (after-tax cost of debt): 利用P= ItPVIFAKd,n + MPVIFKd,n求出Kd ，再利用Ki = Kd(1-t)求出Ki或者Ki = I (1 - t) / B (1 - F) Interest tax rate par value flotation (floating fee) of the bond 实际付出的钱 公司实际拿到的钱2) Kp (cost of preferred stock): Kp = Dp / Pp or Kp = Dp / (Pp F)Dp is the annual dividendPp is the priceF is the selling cost3) Cost of common stock (consists of cost of retained earnings and cost of new common stock): Jcost of retained earnings P0 =t=1Dt(1+Ke)t 倒求出Ke OrKe = D1/P0 +g D is dividend; g is expected growth rateP0 = D1/(1+i) + P1/(1+i) Ks = (P1 P0) + D1/P0Jcost of new common stock Kn=D1/(P0 F) + g JCAPM: 1 the risk-free rate 2 get the beta 3 find the expected rate of return of marketKe = Rf + (Rm - Rf)2. Factors that affect the WACC1) The level of interest rates2) Tax rate3) Capital structure policy4) Dividend policy5) Investment policy Chapter 13 Capital Structure Part 1 (theory)1. MM理论第一定理及推论：条件：perfect market, perfect information and no transaction costs Individuals can borrow as corporations Pays no corporate income taxes No bankruptcy costsNo agency costs结论： the value of the firm is unaffected by its choice of capital structure. Implication: WACCremains when the gearing changes so the value of a firm remains constant regardless of the debt level. 2. MM第二定理（图）：条件：同上，但有公司所得税。两家公司U和L，价值分别是VU = D/Ke 和 VL = D/Ke + I/Kd .D distributed to Us stockholders are reduced by the taxes paid on operating income and the value of U drops.Since I is tax deductible , L realizes a tax savings.PV of tax shield = value of debt tax rate 3. Tradeoff theory (3 graphs)条件：bankruptcy costs and agency costs Bankruptcy costs and agency costs increase with the amount of leverage, and eventually offsets the marginal benefits from the value of the tax shield. Market value of leveraged firm = Market value of unleveraged firm + PV of tax shield PV of bankruptcy costs - PV of agency costs 4. Asymmetric informationsignaling effects.New common equity offerings tend to yield negative stock price responsesNew debt offerings tend to yield no significant stock price responsesRepurchases of common stock have led to large positive announcement returns on the companys common stockActions that increase leverage have generally been associated with positive stock returns. . . Part 2 (calculating) Contribution (边际贡献) Break-even (quantity) point (保本点销售量)Break-even analysis business Marginal of safety (安全边际) financial Cost behavior (成本的习性)DFL (DOL)DOL: (S VC)/(S VC FC)DFL :EBIT/EBIT IEBIT(sales) EPS分析：融资无差别点。1. Break-even: Break-even means the output when EBIT=0Cost behavior: 1) establishes the costs of the marginal increase in production or sales-variable costs. 2)relies on the ability to split fixed costs and variable costs 3)assumes fixed costs are sunk and therefore irrelevant in decision making.Contribution: variable costs taken away from sales to arrive at contribution If contribution is maximized this will automatically maximize profit as fixedcosts are fixed.Break-even chart:Break-even (quantity) pointEBIT = PQB (VQB + F) = 0 QB = F/ (P V) = 保本点销售量Break-even (sales) point销售收入-总变动成本-总固定成本=EBITS VC/SS F = EBIT. 令EBIT = 0 ,其中VC/S是常数。SB = F(1 VC/S)安全边际：实际业务量-保本点业务量安全边际率：安全边际/实际业务量预测目标业务量公式：QB = （目标利润+固定成本）/边际贡献SB = （目标利润+固定成本）/边际贡献率2. DFL / DOLDOL (degree of operating leverage) is defined as the percentage change in operating income that occurs as a result of a percentage change in units sold.DOL = percentage change in operating income / percentage change in units volume Can be changed as (S VC)/(S VC FC)DFL (degree of financial leverage) is defined as the percentage change in Earnings per share that occurs as a result of a percentage change in EBIT. DFL = percentage change in EPS / percentage change in EBITCan be changed as EBIT/EBIT I3. EBIT (Sales) EPS analysisTheres a point for EBIT can get the same EPS though the two firms have different leverage. (graph) Chapter 14Equity & Dividend PolicyReasons for and against financing the firm equityTheories about dividend policy: (1) Dividend irrelevance theory; (2) Bird-in-hand theory; (3) Tax preference theory; (4) Information content, or signaling, hypothesis; (5) Dividend stability; (6) Clientele effect.Stock dividend, stock splits and stock repurchase.1. Advantages of financing the firm equity: 1) No obligation to pay dividends2) Capital does not need to be repaidDisadvantages:1) High cost2) The possibility of lost of control3) Dividends do not have tax deductible2. Reasons for going public: 1) Access to new capital for growth2) Liquidity for existing shareholders3) Allow more people to buy businesses4) Allows founders to diversify5) Borrow more easily or cheaply6) Discipline on management to perform7) Forces managers to articulate strategy clearly and persuasively8) Increased customer recognitionReasons against going public: 1) Dealing with “city folks” is time consuming and/or boring2) City does not understand entrepreneurs3) Stifles creativity4) Focus excessively on return on capital5) Empire building through acquisitions on a stock exchang