财务管理英文版.ppt

Chapter6,FinancialStatementAnalysis,PearsonEducationLimited2004FundamentalsofFinancialManagement,12/eCreatedby:GregoryA.Kuhlemeyer,Ph.D.CarrollCollege,Waukesha,WI,FinancialStatementAnalysis,FinancialStatementsAPossibleFrameworkforAnalysisBalanceSheetRatiosIncomeStatementandIncomeStatement/BalanceSheetRatiosTrendAnalysisCommon-SizeandIndexAnalysis,ExamplesofExternalUsesofStatementAnalysis,TradeCreditors-Focusontheliquidityofthefirm.Bondholders-Focusonthelong-termcashflowofthefirm.Shareholders-Focusontheprofitabilityandlong-termhealthofthefirm.,ExamplesofInternalUsesofStatementAnalysis,Plan-Focusonassessingthecurrentfinancialpositionandevaluatingpotentialfirmopportunities.Control-Focusonreturnoninvestmentforvariousassetsandassetefficiency.Understand-Focusonunderstandinghowsuppliersoffundsanalyzethefirm.,.PrimaryTypesofFinancialStatements,IncomeStatementAsummaryofafirmsrevenuesandexpensesoveraspecifiedperiod,endingwithnetincomeorlossfortheperiod.,BalanceSheetAsummaryofafirmsfinancialpositiononagivendatethatshowstotalassets=totalliabilities+ownersequity.,BasketWondersBalanceSheet(AssetSide),a.Howthefirmstandsonaspecificdate.b.WhatBWowned.c.Amountsowedbycustomers.d.Futureexpenseitemsalreadypaid.e.Cash/likelyconvertibletocashwithin1year.f.Originalamountpaid.g.Acc.deductionsforwearandtear.,CashandC.E.$90Acct.Rec.c394Inventories696PrepaidExpd5AccumTaxPrepay10CurrentAssetse$1,195FixedAssets(Cost)f1030Less:Acc.Depr.g(329)NetFix.Assets$701Investment,LT50OtherAssets,LT223TotalAssetsb$2,169,BasketWondersBalanceSheet(thousands)Dec.31,2007a,BasketWondersBalanceSheet(LiabilitySide),a.Note,Assets=Liabilities+Equity.b.WhatBWowedandownershipposition.c.Owedtosuppliersforgoodsandservices.d.Unpaidwages,salaries,etc.e.Debtspayable1year.g.Originalinvestment.h.Earningsreinvested.,NotesPayable$290Acct.Payablec94AccruedTaxesd16OtherAccruedLiab.d100CurrentLiab.e$500Long-TermDebtf530ShareholdersEquityCom.Stock($1par)g200AddPdinCapitalg729RetainedEarningsh210TotalEquity$1,139TotalLiab/Equitya,b$2,169,BasketWondersBalanceSheet(thousands)Dec.31,2007,BasketWondersIncomeStatement,a.Measuresprofitabilityoveratimeperiod.b.Received,orreceivable,fromcustomers.c.Salescomm.,adv.,officerssalaries,etc.d.Operatingincome.e.Costofborrowedfunds.f.Taxableincome.g.Amountearnedforshareholders.,NetSales$2,211CostofGoodsSoldb1,599GrossProfit$612SGallotherfactorsheldconstant.,OptimalAmount(Level)ofCurrentAssets,025,00050,000,OUTPUT(units),ASSETLEVEL($),CurrentAssets,PolicyC,PolicyA,PolicyB,.ImpactonExpectedProfitability,ReturnonInvestment=NetProfitTotalAssetsLetCurrentAssets=(Cash+Rec.+Inv.)ReturnonInvestment=NetProfitCurrent+FixedAssets,OptimalAmount(Level)ofCurrentAssets,025,00050,000,OUTPUT(units),ASSETLEVEL($),CurrentAssets,PolicyC,PolicyA,PolicyB,.ImpactonExpectedProfitability,ProfitabilityAnalysisPolicyProfitabilityALowBAverageCHighAscurrentassetlevelsdecline,totalassetswilldeclineandtheROIwillrise.,OptimalAmount(Level)ofCurrentAssets,025,00050,000,OUTPUT(units),ASSETLEVEL($),CurrentAssets,PolicyC,PolicyA,PolicyB,.ImpactonRisk,Decreasingcashreducesthefirmsabilitytomeetitsfinancialobligations.Morerisk!Strictercreditpoliciesreducereceivablesandpossiblylosesalesandcustomers.Morerisk!Lowerinventorylevelsincreasestockoutsandlostsales.Morerisk!,OptimalAmount(Level)ofCurrentAssets,025,00050,000,OUTPUT(units),ASSETLEVEL($),CurrentAssets,PolicyC,PolicyA,PolicyB,ImpactonRisk,RiskAnalysisPolicyRiskALowBAverageCHighRiskincreasesasthelevelofcurrentassetsarereduced.,OptimalAmount(Level)ofCurrentAssets,025,00050,000,OUTPUT(units),ASSETLEVEL($),CurrentAssets,PolicyC,PolicyA,PolicyB,SummaryoftheOptimalAmountofCurrentAssets,SUMMARYOFOPTIMALCURRENTASSETANALYSISPolicyLiquidityProfitabilityRiskAHighLowLowBAverageAverageAverageCLowHighHigh,1.Profitabilityvariesinverselywithliquidity.2.Profitabilitymovestogetherwithrisk.(riskandreturngohandinhand!),.ClassificationsofWorkingCapital,TimePermanentTemporary,ComponentsCash,marketablesecurities,receivables,andinventory,.PermanentWorkingCapital,Theamountofcurrentassetsrequiredtomeetafirmslong-termminimumneeds.,Permanentcurrentassets,TIME,DOLLARAMOUNT,.TemporaryWorkingCapital,Theamountofcurrentassetsthatvarieswithseasonalrequirements.,Permanentcurrentassets,TIME,DOLLARAMOUNT,Temporarycurrentassets,.FinancingCurrentAssets:Short-TermandLong-TermMix,SpontaneousFinancing:Tradecredit,andotherpayablesandaccruals,thatarisespontaneouslyinthefirmsday-to-dayoperations.Basedonpoliciesregardingpaymentforpurchases,labor,taxes,andotherexpenses.Weareconcernedwithmanagingnon-spontaneousfinancingofassets.,.Hedging(orMaturityMatching)Approach,Amethodoffinancingwhereeachassetwouldbeoffsetwithafinancinginstrumentofthesameapproximatematurity.,TIME,DOLLARAMOUNT,Long-termfinancing,Fixedassets,Currentassets*,Short-termfinancing*,Hedging(orMaturityMatching)Approach,*Lessamountfinancedspontaneouslybypayablesandaccruals.*Inadditiontospontaneousfinancing(payablesandaccruals).,TIME,DOLLARAMOUNT,Long-termfinancing,Fixedassets,Currentassets*,Short-termfinancing*,FinancingNeedsandtheHedgingApproach,Fixedassetsandthenon-seasonalportionofcurrentassetsarefinancedwithlong-termdebtandequity(long-termprofitabilityofassetstocoverthelong-termfinancingcostsofthefirm).Seasonalneedsarefinancedwithshort-termloans(undernormaloperationssufficientcashflowisexpectedtocovertheshort-termfinancingcost).,Self-LiquidatingNatureofShort-TermLoans,Seasonalordersrequirethepurchaseofinventorybeyondcurrentlevels.Increasedinventoryisusedtomeettheincreaseddemandforthefinalproduct.Salesbecomereceivables.Receivablesarecollectedandbecomecash.Theresultingcashfundscanbeusedtopayofftheseasonalshort-termloanandcoverassociatedlong-termfinancingcosts.,.Risksvs.CostsTrade-Off(ConservativeApproach),Long-TermFinancingBenefitsLessworryinrefinancingshort-termobligationsLessuncertaintyregardingfutureinterestcostsLong-TermFinancingRisksBorrowingmorethanwhatisnecessaryBorrowingatahigheroverallcost(usually)ResultManageracceptslessexpectedprofitsinexchangefortakinglessrisk.,Risksvs.CostsTrade-Off(ConservativeApproach),Firmcanreducerisksassociatedwithshort-termborrowingbyusingalargerproportionoflong-termfinancing.,TIME,DOLLARAMOUNT,Long-termfinancing,Fixedassets,Currentassets,Short-termfinancing,.ComparisonwithanAggressiveApproach,Short-TermFinancingBenefitsFinancinglong-termneedswithalowerinterestcostthanshort-termdebtBorrowingonlywhatisnecessaryShort-TermFinancingRisksRefinancingshort-termobligationsinthefutureUncertainfutureinterestcostsResultManageracceptsgreaterexpectedprofitsinexchangefortakinggreaterrisk.,Firmincreasesrisksassociatedwithshort-termborrowingbyusingalargerproportionofshort-termfinancing.,TIME,DOLLARAMOUNT,Long-termfinancing,Fixedassets,Currentassets,Short-termfinancing,Risksvs.CostsTrade-Off(AggressiveApproach),SummaryofShort-vs.Long-TermFinancing,FinancingMaturity,AssetMaturity,SHORT-TERM,LONG-TERM,LowRisk-Profitability,ModerateRisk-Profitability,ModerateRisk-Profitability,HighRisk-Profitability,SHORT-TERM(Temporary),LONG-TERM(Permanent),.CombiningLiabilityStructureandCurrentAssetDecisions,Thelevelofcurrentassetsandthemethodoffinancingthoseassetsareinterdependent.Aconservativepolicyof“high”levelsofcurrentassetsallowsamoreaggressivemethodoffinancingcurrentassets.Aconservativemethodoffinancing(all-equity)allowsanaggressivepolicyof“low”levelsofcurrentassets.,Chapter9,CashandMarketableSecuritiesManagement,PearsonEducationLimited2004FundamentalsofFinancialManagement,12/eCreatedby:GregoryA.Kuhlemeyer,Ph.D.CarrollCollege,Waukesha,WI,CashandMarketableSecuritiesManagement,MotivesforHoldingCashSpeedingUpCashReceiptsS-l-o-w-i-n-gD-o-w-nCashPayoutsElectronicCommerceOutsourcingCashBalancestoMaintainInvestmentinMarketableSecurities,.MotivesforHoldingCash,TransactionsMotive-tomeetpaymentsarisingintheordinarycourseofbusinessSpeculativeMotive-totakeadvantageoftemporaryopportunitiesPrecautionaryMotive-tomaintainacushionorbuffertomeetunexpectedcashneeds,CashManagementSystem,Collections,Disbursements,Marketablesecuritiesinvestment,Controlthroughinformationreporting,=FundsFlow,=InformationFlow,.SpeedingUpCashReceipts,ExpeditepreparingandmailingtheinvoiceAcceleratethemailingofpaymentsfromcustomersReducethetimeduringwhichpaymentsreceivedbythefirmremainuncollected,.Collections,EarlierBilling,Acceleratepreparationandmailingofinvoicescomputerizedbillinginvoicesincludedwithshipmentinvoicesarefaxedadvancepaymentrequestspreauthorizeddebits,PreauthorizedPayments,PreauthorizeddebitThetransferoffundsfromapayorsbankaccountonaspecifieddatetothepayeesbankaccount;thetransferisinitiatedbythepayeewiththepayorsadvanceauthorization.,.LockboxSystems,TraditionalLockboxApostofficeboxmaintainedbyafirmsbankthatisusedasareceivingpointforcustomerremittances.ElectronicLockboxAcollectionserviceprovidedbyafirmsbankthatreceiveselectronicpaymentsandaccompanyingremittancedataandcommunicatesthisinformationtothecompanyinaspecifiedformat.,LockboxProcess*,Customersareinstructedtomailtheirremittancestothelockboxlocation.Bankpicksupremittancesseveraltimesdailyfromthelockbox.Bankdepositsremittancesinthecustomersaccountandprovidesadepositslipwithalistofpayments.Companyreceivesthelistandanyadditionalmaileditems.,*Basedonthetraditionallockboxsystem,LockboxSystem,DisadvantageCostofcreatingandmaintainingalockboxsystem.Generally,notadvantageousforsmallremittances.,AdvantageReceiveremittancessoonerwhichreducesprocessingfloat.,.ConcentrationBanking,CompensatingBalanceDemanddepositsmaintainedbyafirmtocompensateabankforservicesprovided,creditlines,orloans.,CashConcentrationThemovementofcashfromlockboxorfieldbanksintothefirmscentralcashpoolresidinginaconcentrationbank.,ConcentrationBanking,Improvescontroloverinflowsandoutflowsofcorporatecash.Reducesidlecashbalancestoaminimum.Allowsformoreeffectiveinvestmentsbypoolingexcesscashbalances.,Movingcashbalancestoacentrallocation:,.S-l-o-w-i-n-gD-o-w-nCashPayouts,“PlayingtheFloat”ControlofDisbursementsPayablethroughDraft(PTD)PayrollandDividendDisbursementsZeroBalanceAccount(ZBA)RemoteandControlledDisbursing,.“PlayingtheFloat”,NetFloat-Thedollardifferencebetweenthebalanceshowninafirms(orindividuals)checkbookbalanceandthebalanceonthebanksbooks.,ControlofDisbursements,Firmsshouldbeableto:1.shiftfundsquicklytobanksfromwhichdisbursementsaremade.2.generatedailydetailedinformationonbalances,receipts,anddisbursements.,Solution:,Centralizepayablesintoasingle(smallernumberof)account(s).Thisprovidesbettercontrolofthedisbursementprocess.,RemoteandControlledDisbursing,RemoteDisbursement-Asysteminwhichthefirmdirectscheckstobedrawnonabankthatisgeographicallyremotefromitscustomersoastomaximizecheck-clearingtime.Thismaximizesdisbursementfloat.,RemoteandControlledDisbursing,ControlledDisbursement-Asysteminwhichthefirmdirectscheckstobedrawnonabank(orbranchbank)thatisabletogiveearlyormid-morningnotificationofthetotaldollaramountofchecksthatwillbepresentedagainstitsaccountthatday.,.ElectronicCommerce,ElectronicCommerce-Theexchangeofbusinessinformationinanelectronic(non-paper)format,includingovertheInternet.,.Outsourcing,ImprovingcompanyfocusReducingandcontrollingoperatingcostsFreeingresourcesforotherpurposes*TheOutsourcingInstitute,2002,Outsourcing-Subcontractingacertainbusinessoperationtoanoutsidefirm,insteadofdoingit“in-house.”Whymightafirmoutsource?*,.CashBalancestoMaintain,Theoptimallevelofcashshouldbethelargerof:(1)thetransactionbalancesrequiredwhencashmanagementisefficient.(2)thecompensatingbalancerequirementsofcommercialbanks.,.InvestmentinMarketableSecurities,MarketableSecuritiesareshownonthebalancesheetas:1.Cashequivalentsifmaturitiesarelessthanthree(3)monthsatthetimeofacquisition.2.Short-terminvestmentsifremainingmaturitiesarelessthanone(1)year.,TheMarketableSecuritiesPortfolio,ReadyCashSegment(R$)Optimalbalanceofmarketablesecuritiesheldtotakecareofprobabledeficienciesinthefirmscashaccount.,R$,F$,C$,ControllableCashSegment(C$)Marketablesecuritiesheldformeetingcontrollable(knowable)outflows,suchastaxesanddividends.,TheMarketableSecuritiesPortfolio,R$,F$,C$,FreeCashSegment(F$)“Free”marketablesecurities(thatis,availableforasyetunassignedpurposes).,TheMarketableSecuritiesPortfolio,R$,F$,C$,VariablesinMarketableSecuritiesSelection,Marketability(orLiquidity)Theabilitytosellasignificantvolumeofsecuritiesinashortperiodoftimeinthesecondarymarketwithoutsignificantpriceconcession.,SafetyReferstothelikelihoodofgettingbackthesamenumberofdollarsyouoriginallyinvested(principal).,VariablesinMarketableSecuritiesSelection,MaturityReferstotheremaininglifeofthesecurity.,InterestRate(orYield)RiskThevariabilityinthemarketpriceofasecuritycausedbychangesininterestrates.,SelectingSecuritiesforthePortfolioSegments,ReadyCashSegment(R$)Safetyandabilitytoconverttocashismostimportant.SelectU.S.Treasuriesforthissegment.,R$,F$,C$,ControllableCashSegment(C$)Marketabilitylessimportant.Possiblymatchtimeneeds.MayselectCDs,repos,BAs,eurosforthissegment.,R$,F$,C$,SelectingSecuritiesforthePortfolioSegments,FreeCashSegment(F$)Basechoiceonyieldsubjecttorisk-returntrade-offs.Anymoneymarketinstrumentmaybeselectedforthissegment.,R$,F$,C$,SelectingSecuritiesforthePortfolioSegments,Chapter10,AccountsReceivableandInventoryManagement,PearsonEducationLimited2004FundamentalsofFinancialManagement,12/eCreatedby:GregoryA.Kuhlemeyer,Ph.D.CarrollCollege,Waukesha,WI,AccountsReceivableandInventoryManagement,CreditandCollectionPoliciesAnalyzingtheCreditApplicantInventoryManagementandControl,.CreditandCollectionPoliciesoftheFirm,(1)AverageCollectionPeriod,(2)Bad-debtLosses,QualityofTradeAccount,LengthofCreditPeriod,PossibleCashDiscount,FirmCollectionProgram,.CreditStandards,Thefinancialmanagershouldcontinuallylowerthefirmscreditstandardsaslongasprofitabilityfromthechangeexceedstheextracostsgeneratedbytheadditionalreceivables.,CreditStandards-Theminimumqualityofcreditworthinessofacreditapplicantthatisacceptabletothefirm.Whylowerthefirmscreditstandards?,CreditStandards,AlargercreditdepartmentAdditionalclericalworkServicingadditionalaccountsBad-debtlossesOpportunitycosts,Costsarisingfromrelaxingcreditstandards,ExampleofRelaxingCreditStandards,BasketWondersisnotoperatingatfullcapacityandwantstodetermineifarelaxationoftheircreditstandardswillenhanceprofitability.Thefirmiscurrentlyproducingasingleproductwithvariablecostsof$20andsellingpriceof$25.Relaxingcreditstandardsisnotexpectedtoaffectcurrentcustomerpaymenthabits.,ExampleofRelaxingCreditStandards,Additionalannualcreditsalesof$120,000andanaveragecollectionperiodfornewaccountsof3monthsisexpected.Thebefore-taxopportunitycostforeachdollaroffunds“tied-up”inadditionalreceivablesis20%.Ignoringanyadditionalbad-debtlossesthatmayarise,shouldBasketWondersrelaxtheircreditstandards?,ExampleofRelaxingCreditStandards,Profitabilityof($5contribution)x(4,800units)=additionalsales$24,000Additional($120,000sales)/(4Turns)=receivables$30,000Investmentin($20/$25)x($30,000)=add.receivables$24,000Req.pre-taxreturn(20%opp.cost)x$24,000=onadd.investment$4,800Yes!ProfitsRequiredpre-taxreturn,CreditandCollectionPoliciesoftheFirm,(1)AverageCollectionPeriod,(2)Bad-debtLosses,QualityofTradeAccount,LengthofCreditPeriod,PossibleCashDiscount,FirmCollectionProgram,.CreditTerms,CreditPeriod-Thetotallengthoftimeoverwhichcreditisextendedtoacustomertopayabill.Forexample,“net30”requiresfullpaymenttothefirmwithin30daysfromtheinvoicedate.,CreditTerms-Specifythelengthoftimeoverwhichcreditisextendedtoacustomerandthediscount,ifany,givenforearlypayment.Forexample,“2/10,net30.”,CreditandCollectionPoliciesoftheFirm,(1)AverageCollectionPeriod,(2)Bad-debtLosses,QualityofTradeAccount,LengthofCreditPeriod,PossibleCashDiscount,FirmCollectionProgram,.CreditTerms,CashDiscount-Apercent(%)reductioninsalesorpurchasepriceallowedforearlypaymentofinvoices.Forexample,“2/10”allowsthecustomertotakea2%cashdiscountduringthecashdiscountperiod.,CashDiscountPeriod-Theperiodoftimeduringwhichacashdiscountcanbetakenforearlypayment.Forexample,“2/10”allowsacashdiscountinthefirst10daysfromtheinvoicedate.,SeasonalDating,Avoidscarryingexcessinventoryandtheassociatedcarryingcosts.Acceptdatingifwarehousingcostsplustherequiredreturnoninvestmentininventoryexceedstherequiredreturnonadditionalreceivables.,SeasonalDating-Credittermsthatencouragethebuyerofseasonalproductstotakedeliverybeforethepeaksalesperiodandtodeferpaymentuntilafterthepeaksalesperiod.,CreditandCollectionPoliciesoftheFirm,(1)AverageCollectionPeriod,(2)Bad-debtLosses,QualityofTradeAccount,LengthofCreditPeriod,PossibleCashDiscount,FirmCollectionProgram,.DefaultRiskandBad-DebtLosses,PresentPolicyPolicyAPolicyBDemand$2,400,000$3,000,000$3,300,000Incrementalsales$600,000$300,000DefaultlossesOriginalsales2%IncrementalSales10%18%Avg.CollectionPd.Originalsales1monthIncrementalSales2months3months,DefaultRiskandBad-DebtLosses,PolicyAPolicyB1.Additionalsales$600,000$300,0002.Profitability:(20%contribution)x(1)120,00060,0003.Add.bad-debtlosses:(1)x(bad-debt%)60,00054,0004.Add.receivables:(1)/(NewRec.Turns)100,00075,0005.Inv.inadd.receivables:(.80)x(4)80,00060,0006.Requiredbefore-taxreturnonadditionalinvestment:(5)x(20%)16,00012,0007.Additionalbad-debtlosses+additionalrequiredreturn:(3)+(6)76,00066,0008.Incrementalprofitability:(2)-(7)44,000(6,000)AdoptPolicyAbutnotPolicyB.,.CollectionPolicyandProcedures,Thefirmshouldincreasecollectionexpendituresuntilthemarginalreductioninbad-debtlossesequalsthemarginaloutlaytocollect.,CollectionProceduresLettersPhonecallsPersonalvisitsLegalaction,SaturationPoint,CollectionExpenditures,Bad-DebtLosses,.AnalyzingtheCreditApplicant,Obtaininginformationonth