贝恩咨询分析方法Ratioanalysis

Author:CollinsQian,RatioAnalysis,March1998,2,Agenda,UsingratiosTypesofkeyratiosprofitabilityturnoverleverageliquiditycoverageReturnonEquityRatioexercisesForecastingexerciseAbbreviationsKeytakeaways,3,AnalyzingRatios,Ratiosinisolationaremeaningless.Acompanysratiosmustbeexaminedovertimeand/oragainstitscompetitorsratios.,Historicalcomparison,Competitivecomparison,ComparepresentratioswithsamecompanyshistoricalratiosInstablesituations,historicalratiosmaybeusedtoprojectfutureperformance,Compareacompanysratioswithsimilarfirmsratiosorwithindustryaveragesatthesamepointintime,Lookfortrends,Lookatrelativeperformance,4,TheArtofRatioAnalysis,Whichratiosaremostimportantinagivensituation?Whatitemsshouldbeincluded/excludedincalculatingtheratios?Howmuchinfluencedoesmanagementhaveovertheratios?Whatdotheratiossayaboutthefirmsstrategy?,Ratioanalysisisanartaswellasascience.,5,TheNeedforJudgment,PotentialProblem,Managementcansubstantiallyinfluencefinancialsintheshortterm,Implications,Needtousejudgmenttounderstandfinancials,Ratioanalysisrequireskeenjudgment.,Financialstatementdataishistorical,notproforma,Cross-companycomparisonsaremeaninglessifadjustmentsarenotmadefordifferentaccountingconventions,Thetimingofthereportingperiodinfluencesfundsflowsandrequirements,NeedtounderstandthathistorydoesNOTnecessarilypredictfuture,Needtobeverysensitiveaboutindustry-specificseasonalityandcyclicality,Needtostandardizeacrosscompaniestoadjustfordifferentaccountingmethods,6,Agenda,UsingratiosTypesofkeyratiosprofitabilityturnoverleverageliquiditycoverageReturnonEquityRatioexercisesForecastingexerciseAbbreviationsKeytakeaways,7,TypesofRatios,Ratioshelpusunderstandhowwellacompanyisperforming.Specifically,howmuchreturnisitgeneratingwithwhatlevelofrisk?,Howwelldoesthecompanymanagecostsrelativetorevenues?,Return,Risk,CoverageInterestchargeFixedchargecoverage,LiquidityCurrentratioQuickratio,LeverageAssettoequityDebttoequityDebttototalcapital,TurnoverReceivablesInventoryPayablesAsset,ProfitabilityOperatingmarginROSGrossmargin,Howeffectiveisthecompanyinmanagingitsresources?,Whataretherespectiveclaimsofdebtandequityowners?Howriskyisthebusiness?,Isthecompanyabletomeetitsshort-termobligations?,Isthecompanyabletomeetitslong-termobligations?,8,ProfitabilityRatios-Definitions,*Thisisnotaprofitabilityratio,butitdoesimpactROS,Profitabilityratiosuselineitemsfromtheincomestatement.,Ratios,Definitions,Grossprofitmargin(orgrossmargin),Sales-costofgoodssoldSales,Operatingprofitmargin(oroperatingmargin),EarningsbeforeinterestandtaxesSales,Returnonsales(ROS),ProfitaftertaxSales,Effectivetaxrate*,TaxesProfitbeforetax,9,ProfitabilityRatios-Description,Profitability(ormargin)ratiosareafunctionofboththeindustryandacompanyspositionwithintheindustryboundariesaresetbytheoperatingcharacteristicsoftheindustrywithintheseboundariesprofitabilityratiosaredeterminedbyaplayersrelativepositionBaintypicallyusesgrossprofitandoperatingprofittomeasureprofitabilityROScanbealteredbynon-operatingactivities,suchassourcesoffinancingortaxratemanipulationsExtraordinaryitems,becausetheyareforunusualevents,suchasdiscontinueditemsorassetsales,areexcludedwhenweanalyzetheperformanceofthebasebusiness,Profitabilityratiosmeasureafirmsabilitytomanagecostsrelativetorevenues.,10,ProfitabilityRatios-OverTime,Grossprofitmarginshouldstayconstantorincreasebecausecostofgoodssoldshouldbeaconstantpercentofsalesorshoulddecreaseascompanygetspriceincreasesand/orvolumediscountsOperatingmarginshouldincreaseasfixedadministrativeandsalescostsarespreadoveragreaternumberofunitsEffectivetaxrateshouldstayconstantordecreasesincealargerfirmisabletotakeadvantageofmoretaxshelters,Asacompanygrows,itsreturnonsalesshouldincrease.,Higherreturnonsales,11,ProfitabilityRatios-MarketLeader,Grossprofitmarginshouldbehighersinceamarketleadercantypicallychargemoreforitsgoodsand/orreceivethegreatestvolumediscountsfromsuppliersOperatingprofitmarginshouldbesignificantlyhigher,becausehighervolumemeansfixedcostsarespreadovermoreunitsandbecausethegrossprofitmarginishigherThereshouldbenosignificantdifferenceintheeffectivetaxrateReturnonsalesshouldbesignificantlyhigherbecausetheoperatingmarginshouldbesignificantlyhigher,Themarketleaderinanindustryshouldhavethebestprofitabilityratios.,ThisisconsistentwiththeROS/RMSconceptwhichsaysthatcompanieswithhighrelativemarketsharehavehighreturnsonsales,12,TurnoverRatios-Definitions,Note:Average=(YearBeginning+YearEnd)/2*Salesisoftenagoodproxy*Costofgoodssoldisoftenagoodproxy*Typicallyweuse365days(i.e.,1year)fortheperiod,Turnoverratiosuseacombinationofincomestatementandbalancesheetitems.,Ratios,Definitions,Receivablesturnover,Creditsalesinperiod*Accountsreceivableaveragebalance,Inventoryturnover,CostofgoodssoldinperiodAverageinventoryinperiod,Payablesturnover,Purchasesonaccount*Accountspayableaveragebalance,Assetturnover,SalesinperiodAverageassets,Anyturnoverratiocanbeexpressedasaperiodratiowhichmeasuresthenumberofdaysinthecycle,Daysinperiod*Turnoverratio,Periodratio=,13,TurnoverRatios-TransactionCycle,*Accountspayable,inventory,andaccountsreceivablearethemajorcomponentsofworkingcapital,Itiscriticalforafirmtomanageitspayables,inventory,andreceivables.*,Cashinflow,Cashcollectedforsalesmade,Cashoutflow,Rawmaterialspurchased,Cashdisbursedforrawmaterialspurchased,Finishedgoodsinventory,Salesmade,Accountsreceivableperiod,Accountspayableperiod,X,X,X,14,TurnoverRatios-Description,TurnoverratiosmeasureshowmanytimesperyearagivenresourceisconsumedPeriodratiosmeasurethenumberofdaysthatistakesforagivenresourceto“turnover”Managementsobjectiveistostretchouttheaccountspayableperiod(i.e.,havelowaccountspayableturnover)andshortentheperiodsforaccountsreceivableandinventory(i.e.,havehighaccountsreceivableandinventoryturnover),Turnoverratiosmeasurehowwellafirmismanagingitsresources.,15,TurnoverRatios-Tradeoffs,RatioImprovements,Decreasethereceivablescollectionperiodi.e.,collecttheaccountsreceivablefasterDecreasetheinventoryholdingperiodi.e.,sellcompletedproductsfasterIncreasetheaccountpayableperiodi.e.,takelongertopaysuppliers,StrategicTradeoff,Ifthereceivablescollectionperiodistooshort,customersmaybuyatacompetitorthathasmoregenerouscreditterms.(Oftenthisperiodisdictatedbyindustrynorms)Iftheinventoryholdingperiodistooshortthecompanymaynothaveenoughinventorytofillabigorder.Also,thecompanymaynotbeabletooutlastastrike,eitheratitsownfacilityoratoneofitsprimarysuppliersfacilitiesIftheaccountspayableperiodistoolong,supplierscouldraisetheirprices,chargeinterest(oftenatveryhighrates),orevenrefusetosupplythefirmoncredit.Also,workersmaygetrestlessiftheyhavetowaitlongertoreceivetheirpaychecks.,Managingturnoverratiosmeansmanagingstrategictrade-offs.,16,LeverageRatios-Definitions,*Allthreeratiosherearecalled“leverage”ratiosbydifferentpeople,sobesuretounderstandwhichratioisbeingusedwhensomeoneistalkingaboutleverage,Leverageratiosuselineitemsfromthebalancesheet.,Ratios*,Definitions,DuPontleverageratio,AssetsEquity,Debttoequityratio,Long-termdebtEquity,Debttototalcapitalordebttototalassetsratio,TotalliabilitiesDebt+equity,TotalliabilitiesAssets,=,17,LeverageRatios-Description,Moneycanberaisedfromdebtsources(banks,bondmarkets)orequitysources(stockholders)LeverageratiosreflectboththefinancingpoliciesofthefirmandtheriskinessofthebusinessInordertoanalyzeafirmsleverageratios,oneneedstounderstandthedefinitionsofdebtandequity,Leverageratiosmeasuretherespectiveclaimsofdebtandequityholders.,18,DebtVersusEquity,ContractualpaymentsoverthelifeoftheloanInvestorlegallyguaranteedfullreturnofprincipleplusinterestnothingabovethatIncaseofliquidation,debtorhaspreferentialclaimonproceedsfromsaleofassets,NoguaranteedpaymentsfromcommonstockInvestor“owns”partoffirmrighttoappreciationoffirmsvalueIncaseofliquidation,equityownertakeswhatisleft(maybenothing),Debtandequityhaveverydifferentcharacteristics.,Debt=anythingthatcontractuallyrequirespaymentstobemadebeforetheequityholdershaveaccesstothefirmsearnings,Equity=thevalueofthefirmleftoverafterallthedebtholdershavebeenpaid,Lowerrisktoinvestor;investordemandslowerreturn,Higherrisktoinvestor;investordemandshigherreturn,19,DebtQuestions-DebtandEquity,DebtinLeverageRatiosBaintypicallylooksonlyatlong-termdebt(debtwithatermof1yearormore)Accountantsmeasuredebtasshort-termdebtpluslongtermdebtEquityinLeverageRatiosBaintypicallyusesthemarketvalueofequity(I.e.,thesharepricemultipliedbythenumberofshares).Othersmayusethebookvalueofequity,whichistheamountshownonthebalancesheet,20,DebtQuestions,Accountspayable?Short-termdebt?Long-termdebt?Cancelableleases?Noncancelableleases?Preferredstock?Commonstock?Deferredtax?,Wouldyoudefinethefollowingasdebt?,21,DebtAnswers,AccountspayableShort-termdebtLong-termdebtCancelableleasesNoncancelableleases,Someitemsareclearlydebt,othersareclearlynotdebt,stillothersaredebatable.,Notdebt.Itispartofworkingcapital,andis“secured”bytheinventoryandreceivablesthatitisusedtofinance,Debt,ifitusedtofinancecapitalexpansionsofthecompanyNotdebt,ifitusedtofinanceworkingcapital,Debt.,Notdebt.Becausetheyarecancelable,theyarenotcontractualobligations,Debt.Becausetheyarenon-cancelable,theyarecontractualobligations.(ForallpubliclytradedUScompanies,thepresentvalueofallthenoncancelableleasepaymentsmustbedisclosedinbalancesheetfootnotes.),DebatableArgumentforequity-contractualobligationstopaydividendsonpreferredstockaremetafterdebtholdersclaimsaremetArgumentfordebt-thereisacontractualobligationtopaydividendsonpreferredstockbeforecommonstockdividendpaymentscanbemade,Notdebt.Itisequity,Commonstock,Debt,butdebatable.Oftenconsidereddebtgivenlong-termnature,Deferredtax,Preferredstock,22,LiquidityandCoverageRatios-Definitions,Liquidityratiosuselineitemsfromthebalancesheet.Coverageratiosuselineitemsfromtheincomestatement.,Ratios,Definitions,Currentratio,CurrentassetsCurrentliabilities,Quickratio(acidtest),Cash+marketablesecurities+receivablesCurrentliabilities,Interestcoverageratio,EarningsbeforeinterestandtaxesInterestexpense,Fixedchargecoverage,EarningsbeforeinterestandtaxesAllessentialpayments(includingleasepayments),Liquidity:,Coverage:,23,LiquidityandCoverageRatios-Description,Acceptablevaluesfortheseratiosdifferbyindustry.However,whenthecurrentratioorcoverageratiosfallbelow1thatmeansthefirmisunabletomeetitsobligationsItisausefulexercisetocalculatehowmuchrevenuecoulddrop(orcostsrise)beforecoveragewoulddropbelow1,Liquidityratiosmeasurethefirmsabilitytomeetitsshort-termobligations.Coverageratiosmeasurethefirmsabilitytomeetitslong-termobligations.,24,Agenda,UsingratiosTypesofkeyratiosprofitabilityturnoverleverageliquiditycoverageReturnonEquityRatioexercisesForecastingexerciseAbbreviationsKeytakeaways,25,ReturnonEquity,Returnonequityisdefinedasprofitaftertax(earnings)dividedbyequity.Itrelateseconomicoutputs(profit)toinputs(equity).Ittellsustheamountofprofitsthecompanyearnedoneachdollarthestockholdersinvestedinthefirm.Itisimportanttonotethatnotalloftheearningsarepaidtothestockholderswhentheyareearned.Onlysomeportionoftheearningswillbereturnednowintheformofdividends.Theremainder(retainedearnings)willbere-investedinthecompanytofinancegrowthThesizeofthedividedisdecidedbytheboardofdirectors;anindividualstockholderhasnoinfluenceoverwhenhe/sheactuallyreceivesthereturnthathe/shehasearnedItisacombinationofprofitability,turnover,andleverageratios,Returnonequity,ROE,istheacidtestofsuccessforabusiness.,26,DuPontFormula,ByseparatingROEintoitscomponents,onecangaininsightintohowtoimprovetheperformanceofabusiness.,ROE=,ProfitaftertaxEquity,ROE=,ProfitaftertaxSales,SalesAssets,AssetsEquity,X,X,ReturnonAssets,Leverage,ROS,Assetturnover,ThisisknownastheDuPontformula,ROE=ProfitabilityXTurnoverXLeverage,27,Agenda,UsingratiosTypesofkeyratiosprofitabilityturnoverleverageliquiditycoverageReturnonEquityRatioexercisesForecastingexerciseAbbreviationsKeytakeaways,28,UnidentifiedIndustriesExercise,Theobjectiveofthisexerciseistotestyourunderstandingoffinancialratios.,Exercise:Thebalancesheets(inpercentageform)andselectedratiosforsixindustriesaregivenonthefollowingpage.Pleasematcheachofthesixindustriestothefinancialinformation,CoalminingGrocerystoresHotelsandmotelsLegalservicesPackagedsoftwarePotatochipsandsnacks,29,UnidentifiedIndustriesExercise-Data,30,UnidentifiedIndustriesExercise-Answer,Characteristics:,Financialratios:,Companies:,HotelsandMotels,VeryhighfixedassetsLowinventoryShortcollectionperiodLowassetturnoverHighgrossmarginHighleverage,Fixedassets=65%Inventory=1%Collectionperiod=9daysAssetturns=0.7xGrossmargin=64%Totalliabilitiestonetworth=127%,A,CoalMining,VeryhighfixedassetsLowinventoryLongcollectionperiod,Fixedassets=52%Inventory=2%Collectionperiod=52days,B,PotatoChipscurrentratio=1.9x,D,LegalServices,HighpercentageofcashAlmostzeroinventoryHighassetturnoverHighprofitabilityLongcollectionperiod,Cash=31%Inventory=1%Assetsturns=4.0 xGrossmargin=57%;ROS=12%;ROE=29%Collectionperiod=52days,E,PrepackagedSoftware,HighpercentageofcashHighaccountsreceivableLowinventoryHighgrossmarginLowfixedassetsSignificantintangibleassets(patents),Cash=22%Accountsreceivable=32%Inventory=5%Grossmargin=59%Fixedassets=19%Othernon-currentassets=13.4%,F,31,GilletteExercise,Exercise:PleasecalculateGilletteCompanyskeyfinancialratiosbasedonits1996annualreport,ProfitabilityTurnoverLeverageLiquidityandcoverage,Theobjectiveofthisexerciseistotestyourabilitytocalculatekeyfinancialratios.,Note:Forthisexercise,donotincludemerger-relatedcostsinthecalculations.,32,GilletteExercise-ProfitabilityRatios,*Thisisnotaprofitabilityratio,butitdoesimpactROS*Excludingmerger-relatedcosts.Non-operatingchargesshouldnotbeincludedintheoperatingprofitmargin.,Ratios,GilletteRatioCalculations,Grossprofitmargin(orgrossmargin),Sales-costofgoodssoldSales,Operatingprofitmargin(oroperatingmargin),Earningsbeforeinterestandtaxes*Sales,Returnonsales(ROS),Profitaftertax*Sales,Effectivetaxrate*,TaxesProfitbeforetax,2,049.39,697.7,=,=21.1%,1,231.79,697.7,=,=12.7%,(p.24),(p.24),(p.24,p.27),(p.24),PageNumberin1996AnnualReport,1,636.3+413.09,697.7,=,948.7+283.09,697.7,=,33,GilletteExercise-TurnoverRatios,Note:Average=(YearBeginning+YearEnd)/2*Salesisoftenagoodproxy*Costofgoodssoldisoftenagoodproxy,Ratios,GilletteRatioCalculations,Receivablesturnover,Creditsalesinperiod*Accountsreceivableaveragebalance,9,697.7(2,724.6+2,290.8)/2,=,=3.87,(p.24,p.25),or,3653.87,=94days,Inventoryturnover,CostofgoodssoldinperiodAverageinventoryinperiod,3,681.7(1,358.2+1,267.6)/2,=2.80,(p.24,p.25),or,3652.80,=130days,=,Payablesturnover,Purchasesonaccount*Accountspayableaveragebalance,3,681.7(547.3+498.0)/2,=7.04,(p.24,p.29),or,3657.04,=52days,=,3651.00,Assetturnover,SalesinperiodAverageassets,9,697.7(10,435.3+8,940.1)/2,=1.00,(p.24,p.25),or,=365days,=,PageNumberin1996AnnualReport,34,GilletteExercise-LeverageRatios,*Allthreeratiosherearecalled“leverage”ratiosbydifferentpeople,sobesuretounderstandwhichratioisbeingusedwhensomeoneistalkingaboutleverage.*Theinclusionofdeferredincometaxesinlong-termdebtisdebatable.,Ratios*,GilletteRatioCalculations,DuPontleverageratio,AssetsEquity,Debttoequityratio,Long-termdebt*Equity,Debttototalcapitalordebttototalassetsratio,(p.25),14.5+1,490.4+298.94,490.9,=,=0.40,(p.25),5,944.410,435.3,=,=0.57,(p.25),PageNumberin1996AnnualReport,1,803.84,490.9,=,TotalliabilitiesDebt+equity,TotalliabilitiesAssets,=,35,GilletteExercise-LiquidityandCoverageRatios,Ratios,GilletteRatioCalculations,Currentratio,CurrentassetsCurrentliabilities,Quickratio(acidtest),Cash+marketablesecurities+receivablesCurrentliabilities,Interestcoverageratio,Earningsbeforeinterestandtaxes*Interestexpense,Fixedchargecoverage,Earningsbeforeinterestandtaxes*Allessentialpayments(includingleasepayments),Liquidity:,Coverage:,4,753.22,934.7,=,=1.62,(p.25),76.9+7.0+2,724.62,934.7,=,=0.96,(p.25),2,049.3-44.476.8-9.9,=,=29.97,(p.24),2,049.3-44.4(76.8-9.9)+93.0,=,=12.54,(p.24,p.31),PageNumberin1996AnnualReport,*”Othercharges-net”undernon-operatingchargeshavebeenincludedherebecausetheyappeartoberecurringandthuswillimpactthecompanysabilitytomakeitsinterestpayments.,36,Agenda,UsingratiosTypesofkeyratiosprofitabilityturnoverleverageliquiditycoverageReturnonEquityRatioexercisesForecastingexerciseAbbreviationsKeytakeaways,37,ForecastingExercise-Data,*FinancialstatementshavebeenconstructedforthisexercisebasedinpartonTheGilletteCompanys1996AnnualReport.Sincethedatahavebeenchangedsignificantly,youshouldnotusethemtoanalyzeGillettesfinancialperformance.Forthisexercise,assumethathistoricaldataisagoodindicatorof1997financials.*Networkingcapitalinyear1994is$854million*CumulativeCAPEXattheendof1994is$3,139million,TheNewEnglandRazorCompanyStatementofOperations($Millions),Revenues,-COGS,=Grossprofit,-SG&A,=EBIT,-Taxes,=Netincome,WorkingCapitalBalanceSheet(yearend)($Millions),Accountsreceivable,+Inventory,-Accountspayable,=Networkingcapital*,CashFlowStatement($Millions),EBIT,+Depreciation,-Increaseinworkingcapital,-Taxespaid,-Capitalexpenditure*,=Cashflow,1997,Assumptions,UsingabbreviatedfinancialstatementsforTheNewEnglandRazorCompanyin1995and1996,forecastthestatementsfor1997.*,38,ForecastingExercise-Answer,TheNewEnglandRazorCompanyStatementofOperations($Millions),Revenues,-COGS,=Grossprofit,-SG&A,=EBIT,-Taxes,=Netincome,WorkingCapitalBalanceSheet(yearend)($Millions),Accountsreceivable,+Inventory,-Accountspayable,=Networkingcapital,CashFlowStatement($millions),EBIT,+Depreciation,-Increaseinworkingcapital,-Taxespaid,-Capitalexpenditure,=Cashflow,1995,$8,834,(6,769),2,065,(266),1,799,(667),$1,132,$2,291,269,(1,610),$950,$1,799,266,(96),(667),(593),$709,1996,1997,Assumptions,10%annualgrowth,76.2%ofsales,3.0%ofsales,37.1%effectivetaxrate,27.1%ofsales,4.1%ofCOGS,25.3%ofCOGS,6.5%ofsalesin1998,$11,735,1998,7.4%ofcumulativeCAPEX,39,ForecastingExercise-Assumptions(p.1),Assumptionsshouldbemadebasedonthecompanyshistoricalfinancialdata,aswellasyourjudgmentregardingfuturetrends.,LineItem,Assumptions(Rationale),Alternativemethodofmakingassumption,Revenuegrowth,Historicalgrowthrateof10%(Historicalratejudgedtobeagoodpredictoroffuturerate)