财务分析与证券定价(英文)chapter5

Chapter5,AccountingMeasurementandValuationfromEarningsForecasts,AccountingMeasurementandValuationfromEarningsForecasts,Whatyouwilllearninthischapter,TheprinciplesofaccountingmeasurementThedifferencebetweenearningsandcashflowfromoperationsHowaccrualsandtheaccountingforinvestmentaffecttheincomestatementandthebalancesheetTheconceptofcomprehensiveincomeanditsimportanceforvaluationTherelationshipbetweenearningsandstockreturnsWhystockratesofreturnandaccountingratesofreturndifferWhyvaluationsbasedonforecastingearningscanbeinerrorHowmultiyearearningspayoffsarecalculatedHowearningsyieldscreenswork,ordontwork,TheIncomeStatement:Genentech,Inc,TheIncomeStatement:CadburySchweppes,FeaturesoftheIncomeStatement,1.Dividendsdontaffectincome2.Investmentdoesntaffectincome3.ThereisamatchingofValueadded(revenues)Valuelost(expenses)Netvalueadded(netincome)4.Accrualsadjustcashflows,RevenueAccruals,ExpenseAccruals,Valueaddedthatisnotcashflow,Adjustmentstocashinflowsthatarenotvalueadded,Valuedecreasesthatarenotcashflows,Adjustmentstocashoutflowsthatarenotvaluedecreases,TheRevenueCalculation,Revenue=Cashreceiptsfromsales+NewsalesoncreditCashreceivedforpreviousperiodssalesEstimatesofcreditsalesnotcollectibleEstimatedsalesreturnsDeferredrevenueforcashreceivedinadvanceofsale+Revenuepreviouslydeferred.,TheExpenseCalculation,Expense=Cashpaidforexpenses+AmountsincurredingeneratingrevenuesbutnotyetpaidCashpaidforgeneratingrevenuesinfutureperiods+Amountspaidinthepastforgeneratingrevenuesinthecurrentperiod.,EarningsandCashFlows,Earnings=C-I-i+I+accruals=C-i+accrualsTheearningscalculationaddsbackinvestmentsandputsthembackinthebalancesheet.Italsoaddsaccruals.,EarningsandCashFlows:Wal-MartStores,Accruals,InvestmentsandtheBalanceSheet,Accrualsandinvestmentsareputinthebalancesheet,Shareholdersequity=Cash+OtherAssets-Liabilities,CashfromOperations,Accruals,Freecashflow,CashfromOperations,Investments,UpdatingtheBalanceSheet,TheBalanceSheet:Genentech,TheBalanceSheet:Genentech,TheBalanceSheet:CadburySchweppes,TheStocksandFlowsequation,Thebalancesheetprovidesameasureofthestockofownersvalueatapointintime:B0Earningsintheincomestatementrepresentstheflowofvalueaddedbetweentwopointsintime:Earnings1Dividendsare(net)flowspaidbacktotheownersbetweentwopointsintime:d1Earningsareaddedtobookvalueanddividendsarepaidoutofthebookvaluesothat:whichshowshowthebalancesheetandincomestatementarticulate.Thisiscalledthestocksandflowsaccountingequation.,TheStocksandFlowsequation,Assets,Liabilities,Equity,Equity,Equity,Equity,Earnings1,Earnings2,TheUpdating,EquityGrowth,Year2,Year1,ArticulationofStocksandFlows:SouthwestAirlines,AccountingEarningsandStockReturns,AccountingearningsmeasurevalueaddedinoperationsandstockreturnsarethepricingofvalueaddedinthemarketTheone-periodstockreturnisdefinedasFromthestocksandflowsequationthereforeisthepremium,so,EarningsandStockReturnsforSouthwestAirlines,Cleansurplusincome,orcomprehensiveincomeiscalculatedas:Comprehensiveincome=incomeintheincomestatement+incomeitemsinequity,ModificationforDirtySurplusAccounting:Genentech,EarningsandStockReturnsforGenentech,1995,Dirty-SurplusAccountingUK:CadburySchweppes,BookRateofReturn&StockRateofReturn,Thestockrateofreturn(SRR)foroneperiod:Thebookrateofreturnoncommonequity(ROCE):Somecases:Case1:P1=B1andP0=B0.Then,SR=EarningsSRR=ROCECase2:P0B0and(P1-B1)=(P0-B0).Then,SR=EarningsSRR(P0-B0).Then,SR=Earnings+DpremiumSRRROCEIngeneral,therelationshipwilldependonboththesignofP0-B0(initialpremium)andthechangeinpremium.,P/Bs,ROCEsandMeanStockReturns,P/B,P/BandROCE,P/B,ROCEandT-BillRates,MultiperiodEarnings,Cum-dividendearningsoverTperiods=Earnings1+Earnings2+Earnings3+EarningsT+TerminalEarningsonDividendsforTPeriods,Twocomponentsofmultiperiodearnings:1.Totalearnings2.Totalearningsondividendsreinvested,MultiperiodEarningsandStockReturns,MultiperiodstockreturnsareSubstitutioninthestocksandflowsequationforeachperiodyieldsThreecomponents:AggregateearningsovertheTperiods.EarningsfromreinvestingdividendsChangeinpremium.,EarningsPredictionsandIntrinsicValueCalculations:OnePeriod,TheNo-arbitrageconditionrecognizingthatorJustascum-dividendearningsandthechangeinpremiumexplainactualreturns,expectedcum-dividendearningsandexpectedchangeinpremiumexplainexpectedreturns,EarningsPredictionsandIntrinsicValueCalculations:Multiperiod,ButthisassumesforeknowledgeofVTE!Oneneedsthreecomponentstovaluethestock:AnearningsforecastAdividendforecast(togetearningsondividends)AforecastofthechangeinpremiumEarningsforecastingworksonlyiftheexpectedpremiumchangeiszero.Howfrequentisthis?,RelationshipBetweenCum-DividendsEarningsandReturns,X=Stockreturnoveraten-yearperiod,dividedbystockpriceatthebeginningoftheten-yearperiod.Y=Cum-dividendearningsovertenyears,dividedbystockpriceatthebeginningoftheten-yearperiod.,GrandMeanofX:1.75,BehaviorofPremiumsforTenPremiumGroups,1969-85,EvaluatinganEarningsForecast,EarningsYieldScreen:FruitoftheLoom,Forecasted1996Earnings$1.73Price,1995$24EarningsYield7.