财务分析课程课件

22十二月2022英国布里斯托大学财务分析课程21十二月2022英国布里斯托大学财务分析课程1Week12

AFrameworkforFundamentalAnalysis

BusinessAnalysisWeek12

AFrameworkforFunda2BusinessactivitiesandcapitalmarketsOperatingactivitiesFinancingactivitiesInvestingactivitiesThefirm:ThevaluegeneratorTheInvestors:TheclaimantsonvalueDebtholdersShareholdersSecondaryDebtholdersSecondaryShareholdersCashfromloansCashfromshareissuesDividendsandcashfromsharerepurchasesInterestandloanpaymentsCashfromsaleofdebtCashfromsaleofsharesTheCapitalMarket:TradingvalueSource:Penman,p.8Businessactivitiesandcapita3Whatarewedoing?Financialanalystsare:informationintermediaries;theydigestinformationandprovidesummaryinformationtothepublic/lesssophisticatedinvestors.especiallyimportantwherecapitalmarketsarewelldeveloped.Theyaredoing:Fundamentalanalysis:contextualanalysisofallpubliclyavailableinformationinordertovaluethecompany.Technicalanalysis:spottingsharepricetime-seriespatternsinordertopredictmovementofprices.Whatarewedoing?Financialan4Whatarewedoing?Partoffundamentalanalysis:Financialstatementanalysisandvaluationofsharessoastogivewellinformedinvestmentadvicetoanequityinvestor.Similartowhatsell-sideequitywithinbrokeragehousesaredoing(asopposedtobuy-sideanalystsaffiliatedwithinstitutionalinvestors)Finalproduct:equityresearchreportNoteofcautioninregardoffinancialstatementanalysis:Financialstatementanalysiscanbedoneforvariouspurposes:creditanalysis,competitivebenchmarking,analysisofmergersandacquisitions,etc.DifferentpurposesrequiredifferentapproachtoanalysisFocusofthiscourse:analysisoffinancialperformanceandfinancialpositioninordertoforecastfuturepayoffstoequityholdersWhatarewedoing?Partoffund5Whyarewedoingit?Socialwelfare:Theactivityofanalystsmakemarketsefficient.Therefore,contributiontoefficientallocationofresources.Personalgains:Ifmarketsarenotefficient,theproperanalysishelpsinidentifyingmispricedcompanies.1980’s:marketefficiencyparadigmwidelyaccepted→passiveinvestmentEvidenceofmarketinefficiency→activeinvestmentandarenewedinterestinfundamentalanalysis(WarrenBuffet)Fundamentalanalysis:anchoringonreliableinformation(accounting)ratherthanrumoursandspeculations;long-termperspectiveasopposedtoshort-termgainWhyarewedoingit?Socialwel6Dot-combubble:DellillustrationLate1990’s:unlimitedfaithinprospectofnewtechnologyandinternetfirms;bubbleburstin2001Forthey/e2000Dellhadreportedearningsof$1.7billiononsalesof$25.3billion.TheMVofDell’ssharesatthetimewas$146.4billion3*theMVofGMCandFordMotorCompanycombined(P/E8.5/5.0respectively)Dell’ssharestradedataP/Eof87.9!DespitehealthytradingandforecastedgrowthDell’sstockappearedover-valued.In2000thepersharestockpricefellfrom$58inearly2000to$29in2003.Thepricehadonlyrecoveredto$40in2005.Dot-combubble:Dellillustrat7Dot-combubble:Whatweretheanalystsdoing?Theywereridingthewave:involvedinshort-termspeculationofthemarketmoodratherthanprovidingmoresoberpicturetotheirclientsbasedonfundamentalsofthecompanies.AnalysisbasedoninternetclicksthatdonotgenerateanyincomeConflictofinterest:Manybrokeragehousesaffiliatedwithinvestmentbanks:thebetterpictureofbusiness,morelucrativebusinessiscreatedforthebanks(SEO’s,mergers,etc.)Dot-combubble:Whatwerethe8Dot-combubble:TheroleoffinancialstatementsTheroleofF/Sisto“anchortheinvestorontherisingtideofspeculation”withhardinformationEarningsdidmatter!LossesreportedbyneweconomyfirmsduringthebubbleturnedouttobeagoodpredictoroffailureSurvivingfirmsreportedearningsturnedouttobeabetterindicatoroffutureperformanceMostoftheintangibleassetsdisappearedThemuch-criticisedSoFP(B/S)alsoprovidedgoodforecasts.TheratioofdebtassumedtopursueintangibleswaslargerelativetotangibleassetsandthatratiopredictsimpendingfailureDot-combubble:Theroleoffi9ProcessoffundamentalanalysisBusinessanalysisTradingonthevaluationAccountinganalysisFinancialanalysisForecastingValuationUnderstandingthePastProcessoffundamentalanalysi10ProcessoffundamentalanalysisBusinessanalysisEconomicfactorsIndustrystructureCompetitivestrategyCorporatestrategyAccountinganalysisEvaluationoftheextenttowhichafirm’saccountingcapturestheunderlyingbusinessrealityUnderstandingaccountingdistortionsFinancialanalysisAnalysisoffinancialperformanceandfinancialpositionusingratioandcashflowanalysisProcessoffundamentalanalysi11ProcessoffundamentalanalysisForecastingthefutureForecastingofpayoffsthroughforecastsofbalancesheet,incomestatementandcashflowsValuationConvertingforecastintheestimatesofequityvaluebyusingsomeoftheavailablevaluationmodelsTradingonthevaluationInvestmentrecommendation:hold,buyorsellProcessoffundamentalanalysi12ProcessoffundamentalanalysisFinancialStatementsYear1CurrentfinancialstatementsOtherinformationValuationofequityFinancialStatementsYear2FinancialStatementsYear3ForecastsConvertforecaststovaluationProcessoffundamentalanalysi13ValuationValue=PresentvalueoffuturepayoffsDepositaccount,Loan,Bond=PVoffutureinterestreceivable+principalInvestmentproject=PVoffuturenetcashflowsfromtheprojectCalloption=PVoffutureexpecteddifferencebetweensharepriceandstrikepriceHouse=PVoffuturerentsEquity=PVoffuturepayoffstoshareholdersValueofthefirm=Valueofdebt+ValueofequityNote:Valuation≠AssetpricingValuationisaboutcurrentvalueofvariousclassesofassetsAssetpricingisaboutdeterminingreturnstovariousclassesofassetsValuationValue=Presentvalue14Whatgeneratesvaluetoshareholders?Valueofthefirm=Valueofdebt+ValueofequityValueoftheoperationsandinvestment=Valueofdebt+ValueofequityMiller-Modigliani:CapitalstructureirrelevanceDividendpayoutirrelevanceInperfectandefficientcapitalmarkets,thevalueisgeneratedonlyinoperatingactivities.Whatgeneratesvaluetoshareh15BusinessanalysisEconomicenvironmentIndustryFirmBusinessanalysisEconomicenvi16EconomicfactorsGDPforecastsMaximumrateatwhichbusinesscangrowinthelongrunInterestratesEffectoncostsofborrowingEffectofCHANGESininterestratesconsumptionvssavingdecision:lowerinterestrates,moreconsumption,highersalesInflationAffectsallocationofcapital(capitalescapestocountrieswithlowerinflationorinvestmentincommoditiesorrealassets)EconomicfactorsGDPforecasts17EconomicfactorsForeignexchangeratesImportantforcompaniesexposedtoforeignmarkets(input,outputorinvestment)OilandothercommoditypricesKeyinputstomanybusinessesLookforthecompany’shedging,riskmanagementpoliciesanduseofderivativesBusinesscycleSensitivityofprofitabilitytobusinesscyclevariesacrossindustriesEconomicfactors18SensitivityofsectorprofitabilitytokeymacroeconomicfactorsSensitivityofsectorprofitab19IndustryanalysisUnderstandindustryoperationssupply,production,distributionandmarketingprocesses,technology,natureoftheproductEffectofindustrystructureontheprofitabilityPorter’sfiveforcesanalysisIntensityofcompetitiondeterminesthepotentialforcreatingabnormalprofitsWhetherabnormalprofitsarekeptbytheindustryisdeterminedbytherelativebargainingpowerofthefirmsintheindustryandtheircustomersandsuppliersIndustryanalysis20Porter’s5forcesanalysisIndustryprofitabilityBargainingpowerofbuyersThreatofsubstituteproductsThreatofnewentrantsRivalryamongexistingfirmsBargainingpowerofsuppliersDegreeofactualandpotentialcompetitionBargainingpowerininputandoutputmarketsPorter’s5forcesanalysisIndu21CompetitivestrategyCostleadershipFocusonmakinginternalprocessesmoreefficientOrganisationalfocusoncostcontrolCompetitiononpriceDifferentiationFocusonqualityanduniquenessInvestmentinR&D,engineeringandmarketing;OrganisationfosterscreativityandinnovationPremiumchargedforproductsorservicesFocusAnichestrategythatsuppliesoneofthemarketsegmentswithexactlywhattheywant,beitlowcostoradifferentiatedproductKeyquestion:Howsustainableiscompetitiveadvantage?Usually,notinthelongrunCompetitivestrategy22CorporatestrategySingleormultiplebusiness?Diversifyornot? Yes,ifEconomyofscope(lowertransactioncostsinsidethanoutsidethefirm)IncreasedmarketpowerImportantforcompaniesexposedtoforeignmarkets(input,outputorinvestment)

NoifResultofmanagerialempire-buildingandlackofexpertiseCorporatestrategy2322十二月2022英国布里斯托大学财务分析课程21十二月2022英国布里斯托大学财务分析课程24Week12

AFrameworkforFundamentalAnalysis

BusinessAnalysisWeek12

AFrameworkforFunda25BusinessactivitiesandcapitalmarketsOperatingactivitiesFinancingactivitiesInvestingactivitiesThefirm:ThevaluegeneratorTheInvestors:TheclaimantsonvalueDebtholdersShareholdersSecondaryDebtholdersSecondaryShareholdersCashfromloansCashfromshareissuesDividendsandcashfromsharerepurchasesInterestandloanpaymentsCashfromsaleofdebtCashfromsaleofsharesTheCapitalMarket:TradingvalueSource:Penman,p.8Businessactivitiesandcapita26Whatarewedoing?Financialanalystsare:informationintermediaries;theydigestinformationandprovidesummaryinformationtothepublic/lesssophisticatedinvestors.especiallyimportantwherecapitalmarketsarewelldeveloped.Theyaredoing:Fundamentalanalysis:contextualanalysisofallpubliclyavailableinformationinordertovaluethecompany.Technicalanalysis:spottingsharepricetime-seriespatternsinordertopredictmovementofprices.Whatarewedoing?Financialan27Whatarewedoing?Partoffundamentalanalysis:Financialstatementanalysisandvaluationofsharessoastogivewellinformedinvestmentadvicetoanequityinvestor.Similartowhatsell-sideequitywithinbrokeragehousesaredoing(asopposedtobuy-sideanalystsaffiliatedwithinstitutionalinvestors)Finalproduct:equityresearchreportNoteofcautioninregardoffinancialstatementanalysis:Financialstatementanalysiscanbedoneforvariouspurposes:creditanalysis,competitivebenchmarking,analysisofmergersandacquisitions,etc.DifferentpurposesrequiredifferentapproachtoanalysisFocusofthiscourse:analysisoffinancialperformanceandfinancialpositioninordertoforecastfuturepayoffstoequityholdersWhatarewedoing?Partoffund28Whyarewedoingit?Socialwelfare:Theactivityofanalystsmakemarketsefficient.Therefore,contributiontoefficientallocationofresources.Personalgains:Ifmarketsarenotefficient,theproperanalysishelpsinidentifyingmispricedcompanies.1980’s:marketefficiencyparadigmwidelyaccepted→passiveinvestmentEvidenceofmarketinefficiency→activeinvestmentandarenewedinterestinfundamentalanalysis(WarrenBuffet)Fundamentalanalysis:anchoringonreliableinformation(accounting)ratherthanrumoursandspeculations;long-termperspectiveasopposedtoshort-termgainWhyarewedoingit?Socialwel29Dot-combubble:DellillustrationLate1990’s:unlimitedfaithinprospectofnewtechnologyandinternetfirms;bubbleburstin2001Forthey/e2000Dellhadreportedearningsof$1.7billiononsalesof$25.3billion.TheMVofDell’ssharesatthetimewas$146.4billion3*theMVofGMCandFordMotorCompanycombined(P/E8.5/5.0respectively)Dell’ssharestradedataP/Eof87.9!DespitehealthytradingandforecastedgrowthDell’sstockappearedover-valued.In2000thepersharestockpricefellfrom$58inearly2000to$29in2003.Thepricehadonlyrecoveredto$40in2005.Dot-combubble:Dellillustrat30Dot-combubble:Whatweretheanalystsdoing?Theywereridingthewave:involvedinshort-termspeculationofthemarketmoodratherthanprovidingmoresoberpicturetotheirclientsbasedonfundamentalsofthecompanies.AnalysisbasedoninternetclicksthatdonotgenerateanyincomeConflictofinterest:Manybrokeragehousesaffiliatedwithinvestmentbanks:thebetterpictureofbusiness,morelucrativebusinessiscreatedforthebanks(SEO’s,mergers,etc.)Dot-combubble:Whatwerethe31Dot-combubble:TheroleoffinancialstatementsTheroleofF/Sisto“anchortheinvestorontherisingtideofspeculation”withhardinformationEarningsdidmatter!LossesreportedbyneweconomyfirmsduringthebubbleturnedouttobeagoodpredictoroffailureSurvivingfirmsreportedearningsturnedouttobeabetterindicatoroffutureperformanceMostoftheintangibleassetsdisappearedThemuch-criticisedSoFP(B/S)alsoprovidedgoodforecasts.TheratioofdebtassumedtopursueintangibleswaslargerelativetotangibleassetsandthatratiopredictsimpendingfailureDot-combubble:Theroleoffi32ProcessoffundamentalanalysisBusinessanalysisTradingonthevaluationAccountinganalysisFinancialanalysisForecastingValuationUnderstandingthePastProcessoffundamentalanalysi33ProcessoffundamentalanalysisBusinessanalysisEconomicfactorsIndustrystructureCompetitivestrategyCorporatestrategyAccountinganalysisEvaluationoftheextenttowhichafirm’saccountingcapturestheunderlyingbusinessrealityUnderstandingaccountingdistortionsFinancialanalysisAnalysisoffinancialperformanceandfinancialpositionusingratioandcashflowanalysisProcessoffundamentalanalysi34ProcessoffundamentalanalysisForecastingthefutureForecastingofpayoffsthroughforecastsofbalancesheet,incomestatementandcashflowsValuationConvertingforecastintheestimatesofequityvaluebyusingsomeoftheavailablevaluationmodelsTradingonthevaluationInvestmentrecommendation:hold,buyorsellProcessoffundamentalanalysi35ProcessoffundamentalanalysisFinancialStatementsYear1CurrentfinancialstatementsOtherinformationValuationofequityFinancialStatementsYear2FinancialStatementsYear3ForecastsConvertforecaststovaluationProcessoffundamentalanalysi36ValuationValue=PresentvalueoffuturepayoffsDepositaccount,Loan,Bond=PVoffutureinterestreceivable+principalInvestmentproject=PVoffuturenetcashflowsfromtheprojectCalloption=PVoffutureexpecteddifferencebetweensharepriceandstrikepriceHouse=PVoffuturerentsEquity=PVoffuturepayoffstoshareholdersValueofthefirm=Valueofdebt+ValueofequityNote:Valuation≠AssetpricingValuationisaboutcurrentvalueofvariousclassesofassetsAssetpricingisaboutdeterminingreturnstovariousclassesofassetsValuationValue=Presentvalue37Whatgeneratesvaluetoshareholders?Valueofthefirm=Valueofdebt+ValueofequityValueoftheoperationsandinvestment=Valueofdebt+ValueofequityMiller-Modigliani:CapitalstructureirrelevanceDividendpayoutirrelevanceInperfectandefficientcapitalmarkets,thevalueisgeneratedonlyinoperatingactivities.Whatgeneratesvaluetoshareh38BusinessanalysisEconomicenvironmentIndustryFirmBusinessanalysisEconomicenvi39EconomicfactorsGDPforecastsMaximumrateatwhichbusinesscangrowinthelongrunInterestratesEffectoncostsofborrowingEffectofCHANGESininterestratesconsumptionvssavingdecision:lowerinterestrates,moreconsumption,highersalesInflationAffectsallocationofcapital(capitalescapestocountrieswithlowerinflationorinvestmentincommoditiesorrealassets)EconomicfactorsGDPforecasts40EconomicfactorsForeignexchangeratesImportantforcompaniesexposedtoforeignmarkets(input,outputorinvestment)OilandothercommoditypricesKeyinputstomanybusinessesLookforthecompany’shedging,riskmanagementpoliciesanduseofderivativesBusinesscycleSensitivityofprofitabilitytobusinesscyclevariesa