Financial Analysis参考.ppt

Financial Analysis 3 Chapter 3 - Outline Financial Analysis 4 Categories of Financial Ratios Importance of Ratios Distortion in Financial Reporting Financial Analysis and Ratios What is financial analysis? Evaluating a firm’s financial performance Analyzing ratios or numerical calculations Comparing a company to its industry and to its past performance A long-run trend analysis over a 5-10 year period is usually performed by an analyst. Ratio analysis may not answer questions, but leads to further inquiry Tools of Financial Analysis 4 Categories of Ratios Profitability Ratios Asset Utilization Ratios Liquidity Ratios Debt Utilization Ratios Classification system for ratios(a) A. Profitability Ratios 1. Profit margin 2. Return on assets (ROA) (investment) 3. Return on equity (ROE) (common shareholders) B. Asset Utilization Ratios 4a. Receivable turnover 4b. Average collection period (days sales outstanding) 5a. Inventory turnover 5b. Inventory holding period 6a. Accounts payable turnover 6b. Accounts payable period Four categories of financial ratios (b) B. Asset Utilization Ratios (cont’d) 7. Capital asset turnover 8. Total asset turnover C. Liquidity Ratios 9. Current Ratio 10. Quick Ratio D. Debt Utilization Ratios 11. Debt to total assets 12. Times interest earned 13. Fixed charge coverage Profitability Ratios Show how profitable a company is. The ratios express: Profit Margin or Return on Sales (%) Return on Assets or Return on Investment (%) Return on Equity (%) Asset Utilization Ratios Show how effectively a company uses its assets. The ratios express: Receivables Turnover (times) Average Collection Period (days) Inventory Turnover (times) Capital Asset Turnover (times) Total Asset Turnover (times) Liquidity Ratios LT Show how liquid a company is or how much $ it has to meet S/T needs. The ratios express: Current Ratio (times) Quick Ratio or Acid-Test Ratio (times) Debt Utilization Ratios