[管理学]Chapter.ppt

FinancialStatementAnalysis KRSubramanyamJohnJWild 07 CHAPTER CashFlowAnalysis StatementofCashFlows Cashisthemostliquidofassets Offersbothliquidityandflexibility Boththebeginningandtheendofacompany soperatingcycle Contrast AccrualaccountingandCashbasisaccounting Netcashflowastheendmeasureofprofitability Cashflowanalysishelpsinassessingliquidity solvency andfinancialflexibility RelevanceofCash StatementofCashFlows Statementofcashflows SCF helpsaddressquestionssuchas P402Howmuchcashisgeneratedfromorusedinoperations Whatexpendituresaremadewithcashfromoperations Howaredividendspaidwhenconfrontinganoperatingloss Whatisthesourceofcashfordebtpayments Howistheincreaseininvestmentsfinanced Whatisthesourceofcashfornewplantassets Whyiscashlowerwhenincomeincreased Whatistheuseofcashreceivedfromnewfinancing RelevanceofCash StatementofCashFlows TheSCFreportscashreceiptsandcashpaymentsbyoperating financing andinvestingactivities Operatingactivitiesaretheearning relatedactivitiesofacompany ReportingbyActivities Beyondrevenueandexpenseactivitiesrepresentedinanincomestatement theyincludethenetinflowsandoutflowsofcashresultingfromrelatedoperatingactivitieslikeextendingcredittocustomers investingininventories andobtainingcreditfromsuppliers StatementofCashFlows Investingactivitiesaremeansofacquiringanddisposingofnoncashassets Involveassetsexpectedtogenerateincome lendingfundsandcollectingtheprincipalontheseloans Financingactivitiesaremeansofcontributing withdrawing andservicingfundstosupportbusinessactivities Includeborrowingandrepayingfundswithbondsandotherloans contributionsandwithdrawalsbyownersandtheirreturnoninvestment ReportingbyActivities StatementofCashFlows ReportingbyActivities StatementofCashFlows IndirectMethodNetincomeisadjustedfornon cashincome expense itemsandaccrualstoyieldcashflowfromoperationsDirectMethodEachincomeitemisadjustedforitsrelatedaccrualsBothmethodsyieldidenticalresults onlythepresentationformatdiffers ConstructingtheCashFlowStatement StatementofCashFlows Considerfirstthenetcashfromoperations PreparationoftheSCF Indirectmethod StatementofCashFlows Depreciationandamortizationadd back PreparationoftheStatementofCashFlows StatementofCashFlowsskip Incomev sCashFlows Example Considera 100saleonaccountInperiodofsale netincomeisincreasedby 100butnocashhasbeengenerated NetIncome100Depreciationandamortizationexpense0Gains losses onsaleofassets0Changeinaccountsreceivable 100 NetCashflowfromoperations0Inperiodofcollectionnoincomeisrecorded NetIncome0Depreciationandamortizationexpense0Gains losses onsaleofassets0Changeinaccountsreceivable100NetCashflowfromoperations100 StatementofCashFlows Adjustmentsforchangesinbalancesheetaccountscanbesummarizedasfollows PreparationoftheStatementofCashFlows StatementofCashFlows ConstructingtheStatement Thecompanypurchasedatruckduringtheyearatacostof 30 000thatwasfinancedinfullbythemanufacturer 2 Atruckwithacostof 10 000andanetbookvalueof 2 000wassoldduringtheyearfor 7 000 Therewerenoothersalesofdepreciableassets 3 DividendspaidduringYear2are 51 000 StatementofCashFlows StepsinConstructingtheStatement StartwithNetIncomeAdjustNetIncomefornon cashexpensesandgainsRecognizecashinflows outflows fromchangesincurrentassetsandliabilitiesSumtoyieldnetcashflowsfromoperationsChangesinlong termassetsyieldnetcashflowsfrominvestingactivitiesChangesinlong termliabilitiesandequityaccountsyieldnetcashflowsfromfinancingactivitiesSumcashflowsfromoperations investing andfinancingactivitiestoyieldnetchangeincash 8 Addnetchangeincashtothebeginningcashbalancetoyieldendingcash StatementofCashFlows StatementofCashFlows EquityMethodInvestmentsTheinvestorrecordsasincomeitspercentageinterestintheincomeoftheinvesteecompanyandrecordsdividendsreceivedasareductionoftheinvestmentbalance TheportionofundistributedearningsisnoncashincomeandshouldbeeliminatedfromtheSCF AcquisitionsofCompanieswithStockSuchacquisitionsarenon cash Changesinbalancesheetaccountsreflectingtheacquiredcompanywillnotequalcashinflows outflows reportedintheSCF SpecialTopics StatementofCashFlows PostretirementBenefitCostsTheexcessofnetpostretirementbenefitexpenseovercashbenefitspaidmustbeaddedtonetincomeincomputingnetcashflowsfromoperationsSecuritizationofAccountsReceivableCompaniesaccountforthereductioninreceivablesasanincreaseincashflowfromoperationssincethatrelatestoacurrentasset Analystsshouldquestionwhethertheyrepresenttrueimprovementinoperatingperformanceoradisguisedborrowing SpecialTopics StatementofCashFlows Thedirect orinflow outflow methodreportsgrosscashreceiptsandcashdisbursementsrelatedtooperations essentiallyadjustingeachincomestatementitemfromaccrualtocashbasisReportstotalamountsofcashflowinginandoutofacompanyfromoperatingactivitiesPreferredbyanalystsandcreditorsImplementationcostsWhencompaniesreportusingthedirectmethod theymustdiscloseareconciliationofnetincometocashflowsfromoperations theindirectmethod inaseparateschedule DirectMethod StatementofCashFlows ConvertingfromIndirecttoDirectMethod AnalysisImplicationsofCashFlowsP411 Somelimitationsofthecurrentreportingofcashflow Practicedoesnotrequireseparatedisclosureofcashflowspertainingtoeitherextraordinaryitemsordiscontinuedoperations Interestanddividendsreceivedandinterestpaidareclassifiedasoperatingcashflows Incometaxesareclassifiedasoperatingcashflows Removalofpretax ratherthanafter tax gainsorlossesonsaleofplantorinvestmentsfromoperatingactivitiesdistortsouranalysisofbothoperatingandinvestingactivities LimitationsinCashFlowReporting AnalysisImplicationsofCashFlows AnalysisImplicationsofCashFlows InterpretingCashFlowsandNetIncome AnalysisImplicationsofCashFlows Anincomestatementrecordsrevenueswhenearnedandexpenseswhenincurred Itdoesnotshowthetimingofcashinflowsandoutflows northeeffectofoperationsonliquidityandsolvency ThisinformationisavailableintheSCF Cashflowsfromoperations CFO isabroaderviewofoperatingactivitiesthanisnetincome Itisnotameasureofprofitability Note Anetmeasure beitnetincomeorcashflowsfromoperations isoflimitedusefulness Thekeyisinformationaboutcomponentsofthesenetmeasures InterpretingCashFlowsandNetIncome AnalysisImplicationsofCashFlows Accountingaccrualsdeterminingnetincomerelyonestimates deferrals allocations andvaluations SubjectivityNote CFOeffectivelyserveasacheckonnetincome butnotasubstitutefornetincome CFOexcludeelementsofrevenuesandexpensesnotcurrentlyaffectingcash Ouranalysisofoperationsandprofitabilityshouldnotproceedwithoutconsideringtheseelements InterpretingCashFlowsandNetIncome AnalysisofCashFlows Inevaluatingsourcesandusesofcash theanalystshouldfocusonquestionslike Areassetreplacementsfinancedfrominternalorexternalfunds Whatarethefinancingsourcesofexpansionandbusinessacquisitions Isthecompanydependentonexternalfinancing Whatarethecompany sinvestingdemandsandopportunities Whataretherequirementsandtypesoffinancing Aremanagerialpolicies suchasdividends highlysensitivetocashflows AnalysisofCashFlows CaseAnalysisofCashFlowsofCampbellSoup AnalysisofCashFlows Inferencesfromanalysisofcashflowsinclude WheremanagementcommitteditsresourcesWhereitreducedinvestmentsWhereadditionalcashwasderivedfromWhereclaimsagainstthecompanywerereducedDispositionofearningsandtheinvestmentofdiscretionarycashflowsThesize composition pattern andstabilityofoperatingcashflows InferencesfromAnalysisofCashFlows AnalysisofCashFlows NetincomeplusdepreciationandamortizationEBITDA earningsbeforeinterest taxes depreciation andamortization AlternativeCashFlowMeasures AnalysisofCashFlows Theusingupoflong termdepreciableassetsisarealexpensethatmustnotbeignored Theadd backofdepreciationexpensedoesnotgeneratecash Itmerelyzerosoutthenoncashexpensefromnetincomeasdiscussedabove Cashisprovidedbyoperatingandfinancingactivities notbydepreciation Netincomeplusdepreciationignoreschangesinworkingcapitalaccountsthatcomprisetheremainderofnetcashflowsfromoperatingactivities Yetchangesinworkingcapitalaccountsoftencomprisealargeportionofcashflowsfromoperatingactivities IssueswithEBITDA AnalysisofCashFlows Whilebothsuccessfulandunsuccessfulcompaniescanexperienceproblemswithcashflowsfromoperations thereasonsaremarkedlydifferent Wemustinterpretchangesinoperatingworkingcapitalitemsinlightofeconomiccircumstances Inflationaryconditionsaddtothefinancialburdensofcompaniesandchallengesforanalysis CompanyandEconomicConditions AnalysisofCashFlows FreeCashFlow Anotherdefinitionthatiswidelyused FCF NOPAT ChangeinNOA netoperatingprofitsaftertax NOPAT lesstheincreaseinnetoperatingassets NOA AnalysisofCashFlows Growthandfinancialflexibilitydependonadequatefreecashflow Recognizethattheamountofcapitalexpendituresneededtomaintainproductivecapacityisgenerallynotdisclosed instead mostusetotalcapitalexpenditures whichisdisclosed butcanincludeoutlaysforexpansionofproductivecapacity FreeCashFlow Positivefreecashflowreflectstheamountavailableforbusinessactivitiesafterallowancesforfinancingandinvestingrequirementsto