ppt modul 3 manajemen keuanganwiweko+... · † wecan compare acompanywecan compare a company s...
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Modul ke: ManajemenManajemen KeuanganKeuanganEvaluating a Firm’s Financial Performance
Fakultas
P St di
Hidayat Wiweko,S.E.,M.Si.EKONOMI & BISNIS
Program Studi
Manajemen
MODUL 3 :MODUL 3 : Financial Statement AnalysisFinancial Statement Analysis
• Are�our�decisions�i i imaximizing�
shareholder wealth?shareholder�wealth?
We�will�want�to�answer�questions�about�the�firm’s
• Liquidity• Efficient�use�of�Assets• Leverage (financing)• Leverage�(financing)• Profitability
We�will�want�to�answer�questions�about�the�firm’s
• Liquidity• Efficient�use�of�Assets• Leverage (financing)• Leverage�(financing)• Profitability
Financial�Ratios
• Tools�that�help�us�determine�the�pfinancial�health�of�a�company.
• We can compare a company’s• We�can�compare�a�company s�financial�ratios�with�its�ratios�in�
i ( d l i )previous�years�(trend�analysis).• We�can�compare�a�company’s�p p y
financial�ratios�with�those�of�its�industryindustry.
Example:Example:CyberDragon�Corporation
CyberDragon’s�Balance�ShSheet��($000)
Assets: Liabilities & Equity:Assets: Liabilities�&�Equity:Cash $2,540 Accounts�payable 9,721Marketable�securities 1,800 Notes�payable� 8,500Accounts�receivable 18,320 Accrued�taxes�payable 3,200Inventories 27,530 Other�current�liabilities 4,102Total current assets 50,190 Total current liabilities 25,523Total�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 47,523N t l t & i 31 700 C t k ($10 ) 13 000Net�plant�&�equip. 31,700 Common�stock�($10�par) 13,000
Total�assets 81,890 Paid�in�capital� 10,000Retained�earnings 11,367Total�stockholders'�equity������������34,367Total�liabilities�&�equity 81,890
CyberDragon’s�Income�Statement
CyberDragonOther�Information
1.��Liquidity�Ratios
• Do�we�have�enough�liquid�assets�hi bli i ?to�meet�approaching�obligations?
What is CyberDragon’s Current Ratio?What�is�CyberDragon s�Current�Ratio?
What is CyberDragon’s Current Ratio?What�is�CyberDragon s�Current�Ratio?
50,19025,523 =��1.97
What is CyberDragon’s Current Ratio?What�is�CyberDragon s�Current�Ratio?
50,19025 523 = 1 9725,523 =��1.97
If�the�average�current�ratio�for�the�i d t i 2 4 i thi d t?industry�is�2.4,��is�this�good�or�not?
What is the firm’s Acid Test Ratio?What�is�the�firm s�Acid�Test�Ratio?
What is the firm’s Acid Test Ratio?What�is�the�firm s�Acid�Test�Ratio?
50,190�� 27,53025,523 =���.89
What is the firm’s Acid Test Ratio?What�is�the�firm s�Acid�Test�Ratio?
50,190�� 27,53025,523 =���.8925,523
Suppose�the�industry�average�is�.92.pp y gWhat�does�this�tell�us?
What�is�the�firm’s�Average�Collection�Period?
What�is�the�firm’s�Average�Collection�Period?
18,320
112,760/365 =��59.3�days
What�is�the�firm’s�Average�Collection�Period?
18,320112 760/365 =��59.3�days112,760/365 y
If th i d t i 47 dIf�the�industry�average�is�47�days,�what�does�this�tell�us?
2.��Operating�Efficiency�Ratiosp g y
• Measure how efficiently the firm’s• Measure�how�efficiently�the�firm s�assets�generate�operating�profits.
What�is�the�firm’s�Operating�Income�I (OI OI)?Return�on�Investment (OIROI)?
What�is�the�firm’s�Operating�Income�I (OI OI)?Return�on�Investment (OIROI)?
11,52081,890 =��14.07%
What�is�the�firm’s�Operating�Income�I (OI OI)?Return�on�Investment (OIROI)?
11,52081,890 =��14.07%
•Slightly�below�the�industry�average�of�15%.�
What�is�the�firm’s�Operating�Income�I (OI OI)?Return�on�Investment (OIROI)?
11,52081,890 =��14.07%
•Slightly�below�the�industry�average�of�15%.�
•The�OIROI�reflects�product�pricing�and�the�firm’s�ability�to�keep�costs�y p
down.
What is their Operating Profit Margin?What�is�their�Operating�Profit�Margin?
What is their Operating Profit Margin?What�is�their�Operating�Profit�Margin?
11,520112,760 =��10.22%
What is their Operating Profit Margin?What�is�their�Operating�Profit�Margin?
11,520112,760 =��10.22%
•This�is�below�the�industry�average�of�12%.
What is their Total Asset Turnover?What�is�their�Total�Asset�Turnover?
What is their Total Asset Turnover?What�is�their�Total�Asset�Turnover?
112,76081,890 =��1.38�times
What is their Total Asset Turnover?What�is�their�Total�Asset�Turnover?
112,76081,890 =��1.38�times
The�industry�average�is�1.82�times.��The�firm�needs�to�figure�out�how�to�gsqueeze�more�sales�dollars�out�of�its�
assets.
What�is�the�firm’s�Accounts�Receivable�Turnover?
What�is�the�firm’s�Accounts�Receivable�Turnover?
112,76018,320 =��6.16�times
What�is�the�firm’s�Accounts�Receivable�Turnover?
112,76018,320 =��6.16�times
CyberDragon�turns�their�A/R�over�6.16times�per�year.��The�industry�average
is�8.2 times.��Is�this�efficient?
What is the firm’s Inventory Turnover?What�is�the�firm s�Inventory�Turnover?
What is the firm’s Inventory Turnover?What�is�the�firm s�Inventory�Turnover?
85,30027,530 =��3.10�times
What is the firm’s Inventory Turnover?What�is�the�firm s�Inventory�Turnover?
85,30027,530 =��3.10�times
CyberDragon�turns�their�inventory�over�3.1�times�per�year.��p y
The�industry�average�is�3.9 times.��Is�this�efficient?
Low�inventory�turnover:
The firm may have too muchThe�firm�may�have�too�much�inventory,�which�is�expensive�because:
I t t k tl• Inventory�takes�up�costly�warehouse�space.
• Some�items�may�become�spoiled�or�obsolete.
What�is�the�firm’s�Fixed�Asset�Turnover?
What�is�the�firm’s�Fixed�Asset�Turnover?
112,76031,700 =��3.56�times
What�is�the�firm’s�Fixed�Asset�Turnover?
112,76031,700 =��3.56�times
If�the�industry�average�is�4.6 times,�whatdoes�this�tell�us�about�CyberDragon?y g
3.��Leverage�Ratios(financing�decisions)
M th i t f i d bt• Measure�the�impact�of�using�debt�capital to�finance�assets.• Firms�use�debt�to�lever�(increase)�
returns on common equity.returns�on�common�equity.
How�does�Leverage�work?g
• Suppose�we�have�an�all�equity�financed�firm�worth�$100,000.��Its�earnings this year total $15,000.earnings�this�year�total�$15,000.
ROE =ROE��=
(ignore�taxes�for�this�example)
How�does�Leverage�work?g
• Suppose�we�have�an�all�equity�financed�firm�worth�$100,000.��Its�earnings this year total $15,000.earnings�this�year�total�$15,000.
ROE = = 15%15,000ROE��=��������������������������=��15%100,000
How�does�Leverage�work?g
• Suppose�the�same�$100,000�firm�is�financed�with�half�equity,�and�half�8%�debt (bonds). Earnings are stilldebt�(bonds).��Earnings�are�still�$15,000.
ROE =ROE��
How�does�Leverage�work?g
• Suppose�the�same�$100,000�firm�is�financed�with�half�equity,�and�half�8%�debt (bonds). Earnings are stilldebt�(bonds).��Earnings�are�still�$15,000.
ROE = =15,000�� 4,000ROE��50,000
How�does�Leverage�work?g
• Suppose�the�same�$100,000�firm�is�financed�with�half�equity,�and�half�8%�debt (bonds). Earnings are stilldebt�(bonds).��Earnings�are�still�$15,000.
ROE = = 22%15,000�� 4,000ROE�� ����22%50,000
What is CyberDragon’s Debt Ratio?What�is�CyberDragon s�Debt�Ratio?
What is CyberDragon’s Debt Ratio?What�is�CyberDragon s�Debt�Ratio?
47,52381,890 =��58%
What is CyberDragon’s Debt Ratio?What�is�CyberDragon s�Debt�Ratio?
47,52381,890 =��58%
If the industry average is 47% whatIf�the�industry�average�is�47%, whatdoes�this�tell�us?
What is CyberDragon’s Debt Ratio?What�is�CyberDragon s�Debt�Ratio?
47,52381,890 =��58%
If the industry average is 47% whatIf�the�industry�average�is�47%, whatdoes�this�tell�us?
Can�leverage�make�the�firm�more�profitable?profitable?
Can�leverage�make�the�firm�riskier?
What�is�the�firm’s�Times�Interest�Earned Ratio?
What�is�the�firm’s�Times�Interest�Earned Ratio?
11,5203,160 =��3.65�times
What�is�the�firm’s�Times�Interest�Earned Ratio?
11,5203,160 =��3.65�times
The�industry�average�is�6.7 times.��This�is further evidence that the firm usesis�further�evidence�that�the�firm�usesmore�debt�financing�than�average.
4.��Return�on�Equity
ll h fi ’How�well�are�the�firm’s�managers�maximizing�shareholder�wealth?
What�is�CyberDragon’sReturn�on�Equity (ROE)?
What�is�CyberDragon’sReturn�on�Equity (ROE)?
5,01634,367 =��14.6%
What�is�CyberDragon’sReturn�on�Equity (ROE)?
5,01634,367 =��14.6%
The�industry�average�is�17.54%.
What�is�CyberDragon’sReturn�on�Equity (ROE)?
5,01634,367 =��14.6%
The�industry�average�is�17.54%.Is�this�what�we�would�expect,�given�the�firm’s�leverage?
Conclusion:Conclusion:
• Even�though�CyberDragon�has�higher�leverage�than�the�industry�g g y
average,�they�are�much�less�efficient and therefore lessefficient,�and�therefore,�less�
profitable.
The DuPont ModelThe�DuPont�Model
Brings�together:
• Profitability• Efficiency• Leverage• Leverage
The�DuPont�ModelNet�Profit����Total�Asset����������������Debt
Margin Turnover RatioROE =����������������x�����������������/�(1� )Margin�������Turnover�����������������Ratio/ ( )
The�DuPont�ModelNet�Profit����Total�Asset����������������Debt
Margin Turnover RatioROE =����������������x�����������������/�(1� )Margin�������Turnover�����������������Ratio/ ( )
Net�Income Sales Total�DebtSales�����������Total�Assets������������Total�Assets=������������������x�������������������/(1� )
The�DuPont�ModelNet�Profit����Total�Asset����������������Debt
Margin Turnover RatioROE =����������������x�����������������/�(1� )Margin�������Turnover�����������������Ratio/ ( )
Net�Income Sales Total�DebtSales�����������Total�Assets������������Total�Assets=������������������x�������������������/(1� )
5,016 112,760 47,523= x / (1 � )112,760����������81,890������������������������81,890=�����������������x������������������/��(1� )
The�DuPont�Model
ROE =����������������x�����������������/�(1� )Net�Profit����Total�Asset����������������DebtMargin Turnover Ratio/ ( )Margin�������Turnover�����������������Ratio
=������������������x�������������������/(1� )Net�Income Sales Total�DebtSales�����������Total�Assets������������Total�Assets
= x / (1 � )5,016 112,760 47,523=�����������������x������������������/��(1� )= 14 6%
112,760����������81,890������������������������81,890
=����14.6%
Terima KasihTerima KasihHidayat Wiweko,S.E.,M.Si.