tatap muka ke-02 mk

8/7/2019 tatap muka ke-02 mk

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Ch. 2 - Understanding

Financial Statements, Taxes,and Cash Flows

Ch. 3 - Evaluating a FirmsFinancial Performance


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Tujauan Pembelajaran

Mahasiswa mampu untuk:Membaca laporan keuangan

Menghitung pajak perusahaanMengukur arus kas bebasMenghitung rasio-rasio keuangan dan

menggunakannya untuk mengevaluasiMelakukan analisis dupont


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Pokok Bahasan

Laporan laba rugi dan neraca, dan laporanarus kasMenghitung pajak perusahaanMengukur arus kas bebasAnalisis rasio keuanganAnalisis dupont


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I ncome Statement

SALES

- EXPENSES= PROF I T

Cost of Goods SoldOperating Expenses(marketing, administrative)Financing CostsTaxes


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SALES

- Cost of Goods Sold

GROSS PROF I T

- Operating Expenses

OPERAT I NG I NCOME (EB I T)

- I nterest ExpenseEARN I NGS BEFORE TAXES (EBT)

- I ncome Taxes

EARN I NGS AFTER TAXES (EAT)- Preferred Stock Dividends

- NET I NCOME AVA I LABLE

TO COMMON STOCKHOLDERS

I ncome Statement


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SALES


GROSS PROF I T




- I ncome Taxes




I ncome Statement


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SALES


GROSS PROF I T




- I ncome Taxes




I ncome Statement


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Balance Sheet

Total Assets =

OutstandingDebt

+ShareholdersEquity


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Balance SheetA ssets Liabilities (Debt) & Equity

Current AssetsCashMarketable Securities

Accounts ReceivableI nventoriesPrepaid Expenses

Fixed AssetsMachinery & EquipmentBuildings and Land

Other AssetsI nvestments & patents

Current LiabilitiesAccounts PayableAccrued ExpensesShort-term notes

Long-Term LiabilitiesLong-term notesMortgages

EquityPreferred Stock Common Stock (Par value)Paid in CapitalRetained Earnings


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Assets

Current Assets : assets that are relativelyliquid, and are expected to be converted tocash within a year.

Cash, marketable securities, accountsreceivable, inventories, prepaid expenses.


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Assets



Fixed Assets : machineryand equipment, buildings,and land.


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Assets



Fixed Assets : machinery and equipment,buildings, and land.Other Assets : any asset that is not a currentasset or fixed asset.

I ntangible assets such as patents and copyrights.


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Financing

Debt Capital : financing provided by acreditor.Short-term debt : borrowed money that

must be repaid within the next 12 months.Accounts payable, other payables such asinterest or taxes payable, accrued expenses,short-term notes.

Long-term debt : loans from banks or othersources that lend money for longer than 12months.


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Financing

Equity Capital : shareholders investment inthe firm.Preferred Stockholders : received fixed

dividends, and have higher priority thancommon stockholders in event of liquidationof the firm.Common Stockholders : residual owners of a business. They receive whatever is leftafter creditors and preferred stockholdersare paid.


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I ncome Tax RatesSince 2010

Taxable I ncome Corporate Tax Rate

Tanpa batasan 25%


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Free Cash Flows

Firms OperatingFree cash flows = Firms FinancingFree cash flows

Cash flows generatedthrough the firms

operations andinvestments in assets

=Cash flows paid to - or received by - the firmsinvestors (creditors &

stockholders)


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Calculating Free Cash Flows:An Operating Perspective

After-tax cash flowfrom operations

lessinvestment in net

operating

working capitalless

investments in fixed

and other assets

Operating income+ depreciation- cash tax payments


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operating

working capitalless


and other assets

[Change in current assets]-[change in non-interest

bearing current liabilities]


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operating

working capitalless


and other assets

Change in gross fixedassets, and any other assets that are on the

balance sheet.


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Calculating Free Cash Flows:

A Financing PerspectiveI nterest payments to creditors

- change in debt principal

- dividends paid to stockholders

- change in stock

= Financing Free Cash Flows


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Ch. 3 - Evaluating a Firms

Financial Performance


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W e will want to answer

questions about the firms

LiquidityEfficient use of AssetsLeverage (financing)

Profitability


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Financial Ratios

Tools that help us determine thefinancial health of a company.W

e can compare a companysfinancial ratios with its ratios inprevious years (trend analysis).

W e can compare a companysfinancial ratios with those of itsindustry.


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Example:CyberDragon Corporation


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CyberDragonsBalance Sheet ($000)

Assets: Liabilities & Equity:Cash $2,540 Accounts payable 9,721Marketable securities 1,800 Notes payable 8,500

Accounts receivable 18,320 Accrued taxes payable 3,200I nventories 27,530 Other current liabilities 4,102Total current assets 50,190 Total current liabilities 25,523Plant and equipment 43,100 Long-term debt (bonds) 22,000less accum deprec. 11,400 Total liabilities 47,523Net plant & equip. 31,700 Common stock ($10 par) 13,000

Total assets 81,890 Paid in capital 10,000Retained earnings 11,367Total stockholders' equity 34,367

Total liabilities & equity 81,890


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Sales (all credit) $112,760

Cost of Goods Sold (85,300)Gross Profit 27,460

Operating Expenses:Selling (6,540)General & Administrative (9,400)

Total Operating Expenses (15,940)Earnings before interest and taxes (EB I T) 11,520I nterest charges:

I nterest on bank notes: (850)I nterest on bonds: (2,310)

Total I nterest charges (3,160)Earnings before taxes (EBT) 8,360Taxes (assume 40%) (3,344)

Net I ncome 5,016

CyberDragons I ncomeStatement


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CyberDragonOther I nformation

Dividends paid on common stock $2,800Earnings retained in the firm 2,216Shares outstanding (000) 1,300Market price per share 20Book value per share 26.44Earnings per share 3.86Dividends per share 2.15


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1. Liquidity Ratios

Do we have enough liquid assetsto meet approaching obligations?


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W hat is CyberDragons CurrentRatio?

If the average current ratio for theindustry is 2.4, is this good or not?

50,19025 ,523 = 1. 97


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W hat is the firms Acid Test Ratio?

Suppose the industry average is .92 .What does this tell us?

50,1 90 - 27 ,53 025 ,523 = .89


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W hat is the firms Average CollectionPeriod?

If the industry average is 47 days ,what does this tell us?

18,32 0

112,76 0/365= 59 .3 days


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2. Operating Efficiency Ratios

Measure how efficiently thefirms assets generate operating

profits.


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Slightly below the industry average

of 15% .The OIROI reflects product pricingand the firms ability to keep costs

down.

W hat is the firms Operating I ncomeReturn on I nvestment (O I RO I )?

11, 52 0

81,89 0= 1 4.07%


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W hat is their Operating ProfitMargin?

This is below the industry average of 12% .

11, 52 0112,76 0 = 10. 22%


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W hat is the firms AccountsReceivable Turnover?

CyberDragon turns their A/R over 6.16times per year. The industry averageis 8.2 times. Is this efficient?

112,76 018,32 0 = 6.16 times


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W hat is the firms I nventoryTurnover?

CyberDragon turns their inventory

over 3.1 times per year.The industry average is 3.9 times. Is

this efficient?

85 ,30027 ,53 0 = 3.10 times


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Low inventory turnover:

The firm may have too muchinventory, which is expensive

because:I nventory takes up costly warehousespace.

Some items may become spoiled orobsolete.


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W hat is the firms Fixed AssetTurnover?

If the industry average is 4.6 times, what

does this tell us about CyberDragon?

112,76 031,700 = 3.56 times


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3. Leverage Ratios

(financing decisions)Measure the impact of using debtcapital to finance assets.

Firms use debt to lever (increase)returns on common equity.


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How does Leverage work?

Suppose we have an all equity-

financed firm worth $100,000.Itsearnings this year total $15,000.

ROE = = 15%15,000100,000


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How does Leverage work?

Suppose the same $100,000 firm isfinanced with half equity, and half 8% debt (bonds). Earnings are still$15,000.

ROE = = 22%15,000 - 4,000

50,000


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W hat is CyberDragons Debt Ratio?

47 ,52381,89 0 = 58%

If the industry average is 47% , whatdoes this tell us?

Can leverage make the firm moreprofitable ?

Can leverage make the firm riskier ?


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W hat is the firms Times I nterestEarned Ratio?

The industry average is 6.7 times. Thisis further evidence that the firm uses

more debt financing than average.

11, 52 03,160

= 3 .65 times


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4. Return on Equity

How well are the firms managersmaximizing shareholder wealth?


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W hat is CyberDragonsReturn on Equity (ROE)?

5,01 634 ,367 = 1 4.6%

The industry average is 17.54% .

Is this what we would expect,given the firms leverage?


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Conclusion:

Even though CyberDragon hashigher leverage than the industry

average, they are much lessefficient, and therefore, less

profitable.


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The DuPont Model

Brings together:

ProfitabilityEfficiency

Leverage


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Net Profit Total Asset Debt

Margin Turnover Ratio

Net I ncome Sales Total Debt

Sales Total Assets Total Assets

ROE = x / (1- )

= x /(1- )

The DuPont Model


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