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Chapter 1
What is Financial Analysis?
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Defining Financial Analysis
Financial analysis is the process of
evaluating financial and other information
for decision-making.
A six-step approach is suggested for
systematic financial analysis.
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Six-step Process
Identify purpose of financial analysis
Corporate overview
Financial analysis techniques
Detailed accounting analysis
Comprehensive analysis Decision or recommendation
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Corporate Overview
Industry analysis--key economic
characteristics, historical context, profit
drivers, business risks
Firms business strategy--competitive
strategy given the industry characteristics
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Industry Analysis
Competition--growth rates, concentrationratios, degree of product differentiation,
economies of scale (& relative fixed &variable costs), substitute products
Legal barriers--patent & copyrights,licensing, regulation
bargaining power of buyers (& suppliers) &price sensitivity
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Industry Analysis Criteria
What is the industry?
Relative size & significance
Largest companies
Geographic presence
Business cycle effects, current situation Future potential
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Business Strategy
Cost leadership: low cost producer,
economies of scale, efficient production,
low input prices
Product differentiation: specific attributes
that customers value (e.g., quality, variety,
service, delivery time), brand name Importance of core competencies
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Business Strategy Criteria
Historical perspective
Primary focus of operations
Most important strategy
Major operating segments
Corporate outlook/ forecast
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Qualitative Analysis--Dell
Computer Industryprimarily PCs: high tech, competitive (e.g.,
Gateway, IBM, Apple, others), changing products,high growth rates, low barriers of entry
Business strategy--(1) cost leadership strategy: directselling, made-to-order manufacturing, early on theinternet, low receivables; (2) product differentiation??[IBM clones, Intel & Microsoft components]
Current situationmarket share; what is the impact ofthe business cycle (e.g., PCs are durable goods)?
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Quantitative Financial Analysis
Systematic analysis of key elements based
on analysis context
Ratios, cash flows, common-size, timeseries, comparative (e.g., specific firms,
industry, all firms), models (e.g., DuPont,
Altmans) In-depth analysis for red flag items
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Quantitative Financial Analysis
Financial Statements
Common-size Analysis
Financial Ratios
Growth/trend Analysis
Quarterly analysis DuPont Model
Market Analysis
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Detailed Accounting Analysis
Does accounting information capture the
underlying business reality?
Identify areas of accounting flexibility &evaluate accounting policies (choices) &
disclosures; especially notes & MD&A
Evaluate earnings management potential
Recast accounting numbers when necessary
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Comprehensive Analysis
Summarize key points: what is particularly
important for decision making?
Red flags are particularly important
Consider a written executive summary
Consider a rating scale, such as 1-10
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Decision
What is the recommendation or decision?
What is the key rationale for this decision?
[This is based on the specific decision: for
a credit decision the key factors relate to
credit risk, with particular focus on leverage
and liquidity.] Be prepared to defend this decision.
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Chapter 2
The Financial Environment
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Capital Markets
Equity Debt
Primary Initial public
offering
Bank loan,
initial debt
security offering
Secondary Buying &
selling of stocks
on securities
markets
Buying &
selling on
secondary debt
market
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Credit Decisions
Commercial banks provide short-term
commercial loans
The major concern: will the company payinterest & principal when due?
Loan terms: interest rate, collateral, debt
covenants
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Equity Investment Decisions
Public securities trade on formal market
exchanges (these are secondary markets)
Buying & selling are now relatively cheaptransactions
Mutual funds are a useful alternatives to
individual securities
Stock investing has high short-term risks
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SEC Regulation
Mission: Protect investors & maintain integrity ofthe securities markets
Established following the Great Market Crash(SEC Act of 1934)
SEC requires public registration, proxy statements& annual (10-K) and quarterly (10-Q) reports, 8-K
for specific events Update: Sarbanes-Oxley Act of 2002 & Public
Company Accounting Oversight Board; Dodd-Frank, 2010
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Goals of Financial Accounting in
a Market Economy? Capture business economics of the firm
(e.g., relationship to industry, competitive
strategy, business model). How does firmcreate value?
Reduce management discretion on financial
reporting (what is reality? Vs. misleadinginformation--analysts sort this out). Note
management incentives for earnings
management
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Accounting Regulators
Securities & Exchange Commission (SEC)--
regulates securities markets and financial
reporting (10-K, 10-Q, 8-K) Financial Accounting Standards Board (FASB)--
promulgates GAAP
International Accounting Standards Board
(IASB)issuing International Financial Reporting
Standards (IFRS)
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U.S. Standard Setters:
1938-Present Committee on Accounting Procedures (CAP)
issued 51 Accounting Research Bulletins
(ARBs)--1938-59 Accounting Principles Board (APB) issued 31Opinions--1959-73
Financial Accounting Standards Board (FASB)
has issued 168 Statements through 2009(SFASs) plus other standardsnow StandardsCodification in 4 volumes, by topic
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The FASB Structure
FASAC
Pronouncements
Due Process
FASB
Pronouncements
Due Process
GASB GASAC
FAF
Sponsoring Organizations
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The FASB
Seven member board, full time, appointed byFAF, presumed independent
Extensive due process: agenda items, discussionmemoranda (DM), exposure drafts (ED),pronouncements, public exposure with written &oral comments
Super-majority (5-2 vote) [simple majority used1977-90]
Standard setting a political process
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Annual Report Information
Corporate Overview
MD&A
Financial Statements: Balance Sheet,
Income Statement, Statement of Cash
Flows, Statement of Equity
Notes to financial statements
Auditors Opinion
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Management Incentives
Managers have incentives to present informationin the most favorable light (e.g., bonuses, stockoptions, promotions)
Accounting choice: accounting polities, estimates,additional disclosures
Standardize vs. estimates: what is reality?
Management have best information, butcommunications to investors may not becompletely credible
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Financial Statement
Considerations Managers information on economic reality
Estimation errors
Distortion from managers accounting
choices & disclosure
Question: Can investor perceptions be
manipulated?
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Finance Theory Perspectives
Efficient Markets
Random Walk
Portfolio Theory
Beta Analysis
Economic Behavior & Agency Theory
Earnings Management & Accounting
Choice
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Efficient Markets
Markets are efficient if information is
impounded immediately in capital prices in
an unbiased fashion Research supports market efficiency in the
semi-strong form, for short windows
Why?Analyst following
Note long-term anomalies & other
challenges (e.g., behavioral economics)
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Random Walk
The concept that a professional portfolio
cannot outperform a randomly selected
stock portfolio Research generally confirms this result
Consistent with efficient markets; that is, all
information has been impounded in stockprice
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Portfolio Theory
Harry Markowitz introduced the concept ofportfolio diversification with his 1952
dissertation Portfolio theory insists that investment
portfolios should be diversified to reducethe risk relative to return
Capital asset pricing model: E(Ri) = Rf+[E(Rm)Rf)
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Beta Analysis
Beta () comes directly from the slope ofthe market model: Rit= i+ iRmt+ eit
Beta measures the relationship betweenprice movements of the individual stock tomarket averages
Beta is a measure of systematic risk, wherea =1 stock should move with the market; a>1 stock has greater market risk
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Economic Behavior
Rationality: assume bounded rationality
people are intendedly rationale but limited
Self-interest behavior:Obedience
Simple self interest
Opportunism (self interest with guile--that is, willing to violate normal ethical
boundaries for personal benefit)
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Agency Theory
Contracts have a principal (e.g., owners)
and agent (e.g., managers). The principal
will attempt to maximize wealth, contract toavoid conflict, and minimize transaction
and agency costs.
Agency costs: information asymmetries(limited information by one side), adverse
selection, moral hazard (e.g., shirking).
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How to Reduce Agency Costs
Better acquisition decisions
Monitoring--including audits and financial
reporting
Align preferences of agents with principals
(e.g., debt covenants, management
compensation)--a reason for stock options
Control devises such as budgets
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Earnings Management
Operations and discretionary accountingmethods to adjust earnings to a desired
outcome, often income smoothing Underlying theory: agency theory,
transaction cost economics
Importance of efficient contracting:corporations are a network of contracts andexist because they write contracts efficiently
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Accounting Choice
Discretionary choices to optimize behavior,using techniques such as:
1. Select alternative accountingmethods (e.g., inventory) & levelof disclosure (e.g., contingencies)
2. Lobbying (e.g., on proposed
standards)3. Financial, production & investment
activities
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Discretion Under GAAP
Taking a bath
Creating hidden reserves
Off-balance-sheet financing
Overstating performance (e.g., aggressive
revenue recognition)
Not reporting obligations (contingencies,
commitments, other liabilities)
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Earnings Manipulation
Because alternatives are allowed, financial
accounting has many discretionary aspects.
Managers can manipulate income by timing (e.g.,recognition this year v next year) and
classification (e.g., ordinary v extraordinary)
Accruals can be mandatory (e.g., other post
employment benefits) or voluntary (e.g.,depreciation)
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Earnings Quality
Importance of full disclosure
Look for conservative reporting
Review indicators of high quality
Relationship of risk to earnings quality
Be aware of earnings management
incentives and evidence of earnings
manipulation
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Normalizing Income
Attempt to determine earning power--related tonormal operating earnings
Remove the noise--usually associated withnonrecurring items
Separate analysis of nonrecurring items--reorganization, big bath write-offs, changingGAAP
Evidence of earnings manipulation may requiresubstantial adjustments to arrive at normalearnings
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Financial Analysis Decision
Based on Elliotts value chain of
information: this is the $1,000 per hour
stage The purpose of financial analysis is to arrive
at an informed recommendation or decision
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Chapter 3
The Financial Statements
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Financial Statements
Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Stockholders Equity
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Balance Sheet
Assets: probable future economic benefits
Liabilities: probable future economic
sacrifices
Stockholders Equity: residual interest,
representing ownership interest (also called
net assets)
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Assets
Current Assets (cash & cash equivalents,
short-term marketable securities), accounts
receivable, inventory, other) Property, plant & equipment
Long-term investments
Other assets
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Liabilities
Current Liabilities (accounts payable,
accrued & other current liabilities)
Long-term debt
Commitments & contingencies
Other liabilities
Potential off-balance sheet debt
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Stockholders Equity
Preferred stock
Common stock
Other paid-in capital
Retained earnings
Treasury stock
Other comprehensive income
Other equity items
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Income Statement
Revenues: inflows from major operations
Expenses: outflows from major operations
Gains & Losses: changes in equity fromperipheral activities
Net income: bottom line all operating
activities recorded on the income statement Comprehensive income: Changes in equity
from all non-owner sources
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Revenue
Sales
Services
Other revenue items
Importance of revenue recognition criteria
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Operating Expenses
Cost of goods sold (manufacturing)
Cost of sales (services or services included)
Operating expenses (selling, general &
administrative, research & development,
other)
Interest income & expenses & related
Provision for tax
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Non-recurring Items
Extraordinary items
Discontinued operations
Accounting changes
Other non-recurring items
Other gains & losses
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Earnings Measures
Gross profit
Operating income
Income before tax
Income from continuing operations
Net income
Comprehensive income
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Cash Flow Statement
Cash Flows from Operations
Cash Flows from Investing Activities
Cash Flows from Financial Activities
Statement of Stockholders Equity
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Cash From Operations
Net income
Depreciation & amortization
Other operating adjustments
Changes in non-cash working capital items
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Cash From Investing &
Financing Cash from investing
Investment purchases
Investment maturities & sales
Capital expenditures
Cash from financing
Issuance of equity
Purchase/acquisition of equity
New debtDebt maturities or retirement
Dividends
Treasury Stock
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Statement of Stockholders
Equity Reconciliation of stockholders equity,
alternative formats used
Key categories (changes)Common stock, other paid-in capital
Retained earnings
Treasury stockOther comprehensive income
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Chapter 4
Quantitative Financial Analysis
Using Financial Statement
Information
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Quantitative Financial Analysis
Systematic analysis of key elements based
on analysis context
Quantitative techniques to standardizefinancial information for relevant
comparisons
In-depth analysis for key factors, includingred flags
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Quantitative Financial Analysis
Financial Statements
Common-size Analysis
Financial Ratios
Growth Analysis
Du Pont Model
Earnings Quality/Normalizing Earnings
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Useful Financial Comparisons
Benchmarks: rules of thumb or averages
Common Sense
Trend Analysis (analysis over time)
Near Competitors
Industry Averages
Market Averages
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Common-size Analysis
Overview vs. detail
Balance sheet: total assets = 100%
Income Statement: sales (or total revenues)= 100%
Comparisons over time & across firms (or
industry averages)
Useful starting point for financial overview
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Ratio Analysis
A ratio converts financial information to apercentage, one approach to standardization
Each ratios provides a somewhat different analysis
Ratios overlapa problem in one area shouldshow up as problems in other areas
The importance of specific ratios differs, based on
the purpose of the financial analysis Ratios for the most recent period are usually the
most important
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Ratio Categories
Liquiditycash, working capital & cash
flow related
Activityturnover ratios as possibleefficiency measures
Leveragedebt & solvency analysis
Performance (or profitability)bottom lineor earnings related
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Liquidity Ratios
Current ratio: current assets/currentliabilities
Quick (acid test) ratio: (cash+marketablesecurities+net receivables)/current liabilities
Cash ratio: (cash+marketablesecurities)/current liabilities
Operating ratio: cash flows fromoperations/current liabilities
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Leverage Ratios
Debt to equity ratio: total liabilities/total stockholdersequity
Debt ratio: total liabilities/total assets
Interest coverage: (income before tax +interestexpense)/interest expense [note that the numerator isearnings before interest and taxes or EBIT]*
Long-term debt to equity: long-term liabilities/totalstockholders equity
Debt to market equity: total liabilities at book value/totalequity at market value
*alternatively: (income from continuing operations+ interest expense + tax expense)/interest expense
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Activity Ratios
Inventory turnover: cost of sales [orCOGS]/average inventory
Receivables turnover: sales/average accounts
receivable Payables turnover: sales/average accounts payable
Working capital turnover: sales/average workingcapital
Fixed asset turnover: sales/average property, plant& equipment
Total asset turnover: sales/average total assets
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Activity Ratios in Days
Average days inventory in stock:365/inventory turnover
Average days receivables outstanding:365/receivables turnover
Average days payable outstanding:365/payables turnover
Length of operating cycle: average daysinventory + average days receivables
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Profitability
Gross margin: (Sales-cost of sales)/sales
Return on sales: net income/sales
Return on assets: net income/average total assets
Pretax return on assets: earnings before interest &taxes/average total assets
Return on total equity: net income/average
stockholders equity Dividend payout: common dividends/net income
[per share basis: dividends per share / EPS]
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Du Pont Model
ROE = Profitability x Activity x Solvency
Net Income / Average Common Equity =
(Net Income / Sales) x (Sales / AverageTotal Assets) x (Average Total Assets /
Average Common Equity)
ROA = Profitability x Activity
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Decomposition using Du Pont
Start with Return on Sales
Activity is avg. total asset ratiothis is a measure of assetturnover or efficiency
ROS x ATAR is Return on Assets (calculate as net income/ average total assets)
Solvency is ATA / Avgas. Common Equitythis is astandard leverage ratio
ROA x Solvency is Return on Equity (calculate as netincome / average common equity)
In summary, the differences between ROS, ROA & ROEdepend on activity & solvency
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Du Pont Model
Ratio
Profit (Return on Sales)
Activity (AssetTurnover)
Return on Assets
Solvency (Common
Equity Leverage)
Return on Equity
Calculation
Net Income/Sales
Sales/Avg. Total Assets(ATA)
Net Income/ATA
ATA/Average Common
Equity (ACE)
Net Income/ ACE
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Ratio Analysis Limitations
Ratios are presented on a percentage basis
Relative size is ignored (e.g., both large &
small firms can be compared) It is assumed that all numbers used are
correct (consider both possible errors andearnings management)
If the numbers are not reliable, ratios are notparticularly useful
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Rating the PC Companies
Dell Gateway Apple
Liquidity 4 5 8
Activity 9 6 8
Leverage 6 6 8
Perform. 6 1 RF 2 RF
Du Pont 6 1 RF 2 RF
Overall 6 2 RF 4
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Chapter 5
Multiperiod Quantitative Financial
Analysis
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Growth Analysis
(period-by-period change) Long-term trends over time can be significant. Are
current year performance measures consistent withearlier years (e.g., maintaining consistent ratios
while sales are rising smoothly)? As a first step, present growth rates (including %
increases) for the last 5-10 years
Declining or negative growth rates might beobvious red flags; Red flags and other indicatorsof poor growth performance require furtheranalysis
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Base-Year Analysis
(also called Trend Analysis) Set the earliest year, evaluated as the base
year, at 100. [Note: this assumes that
earliest year is normal.] Calculate growthby dividing the more current year numbers
by the base year number.
This is an alternative presentation to growthrate percentages over 5-10 years (or more)
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Quarterly Analysis
The most recent financial data is presentedquarterly (e.g., 10-Q). [The one exception is atyear end, with annual information is presented]
Financial analysts focus on quarterly data and thequarterly earnings announcement is the mostimportant (& earliest) information
Common-size and ratios analysis is conducted,and compared over earlier quarters: particularlyimportant are current quarter data to (1) the
previous quarter and (2) the same quarter one yearago
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Chapter 6
Quantitative Financial Analysis
Techniques: Incorporating Market
Information
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Quantitative Market Analysis
Stock prices & stock charts
Earnings per shareactual & forecast
Price earnings ratios (PE)
Dividend yield
Market value & market-to-book
Price earnings to growth ratios (PEG)
Valuation models
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Stock Prices
Prices change continuously
Using daily closing price
Stock charts, various periods
Industry & market comparisons
Internet sites
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Earnings Per Share (EPS)
Performance measure on per share basis
Basic vs. diluted
Forecasted EPS (Analysts Estimates onYahoo)
Annual vs. quarterly EPS
Annuallast 4 quarters
5 year forecasts (relevance vs. reliability)
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PE Ratios
Stock price as a market premium forearnings
Which price? (most current, historic) Which EPS? (current year actual--usually
last 4 quarters, future forecast, basic vs.diluted)
Closing prices
Alternatives & how to evaluate them
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Market-based Ratios
Price earnings ratio (PE): Stock price / EPS
Dividend Yield: Dividend per share / Stock
price Market value: stock price x shares
outstanding
Market-to-book: market value /stockholders equity
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Dividends
Dividends given on a per share basis; focus on
dividends per share, last 4 quarters. [Note
equivalent to dividends/shares outstanding.]
Dividend yield: dividends per share/stock price
income focus; average yield is about 2% for the
S&P 500.
Dividend payout: dividends per share/earnings pershare.
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Market-related Ratios
Market-to-book: market value / stockholders
equity [or measure on a per share basisstock
price / book value per share]why is a market
premium to book common?
Sales to market value: annual sales to
outstanding shares x (1) year-end closing market
price or (2) most recent closing market price.
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Price Earnings to Growth (PEG)
High PE is usually associated with the expectationof high earnings growth, which can be evaluatedwith PEG
Historic PEG = PE based on actual EPS / 5-yearhistoric earnings growth
Forecast PEG = PE based on forecast EPS / 5-year earnings forecast
PEG is useful to evaluate growth stocks, lessuseful for income stocks
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Earnings-based Growth Model
P = kE / (rg) where P is expected stock price,
k is dividend payout rate (actual or predicted), E is
EPS, r is the discount rate, and g the projected
earnings growth rate
This model requires dividends, the discount rate is
arbitrary (it could be the actual cost of capitalor
based something else), and the growth rate is aforecast; results can change substantially using
different assumptions
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Stock Screening
The purpose of stock screening is thedetermine which firms meet specific criteria(such as minimum ROE or dividend yield)
Several internet sites have stock screeners,such as Yahoo
The technique is useful to limit the number
of companies on which to conduct acomplete financial analysis
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Chapter 11
Capital Structure & Credit Risk
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Corporate Liabilities
Accounts Payable
Commercial Paper & other short-term
market liabilities Other current liabilities
Corporate Bonds
Other long-term market debt
Other liabilities (including off-balance-
sheet)
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Credit Risk
Credit risk: probability that a corporation
will either default on debt or declare
bankruptcy.Default risk: probability that a
corporation will not pay interest &
principal when they come due
Bankruptcy risk: probability that a
corporation will file for bankruptcy
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Default Risk
What is the chance (probability) that the
corporation will fail to make interest or principal
payments when due?
Because of high collection costs, creditors
evaluate credit risk carefully
Failure events: restructurings, especially troubled
debt restructuring; default; bond rating down-grading; going-concern qualifications; bankruptcy
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Bankruptcy Risk
Probability that a firm will file for Chapter
11 bankruptcy.
Importance of failure events: losses,defaults, troubled debt restructuring, going
concern qualified audit opinion
Altmans Z-score can be used as aprediction model for credit risk
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Financial Leverage
Financial leverage is the relative mix of debt (especiallylong-term debt) & equity
Long-term debt increases credit risk & has interest charges
The financial leverage index (FLI) is ROE/ROA A high FLI indicates the increasing use of leverage to raise
ROE relative to ROA
The financial structure leverage ratio (FSLR) is average totalassets/average common equity. This is the same ratio used in
the DuPont Model for solvency. A higher ratio means higherleverage, but also a higher ROE. The ratio is identical to FL1if there is no preferred stock. When preferred stock ispresent, the FSLR is higher than FLI.
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Altmans Z-score, 1983 Model
6.56 x (working capital / total assets)
+ 3.26 x (retained earnings / total assets)
+ 6.72 x (EBIT / total assets)
+ 1.05 x (book value of equity / book value
of debt)
= Altmans Z-score
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Altmans Z-score
Indicator of overall financial health
Cutoffs: les than 1.1 bankrupt
1.12.6 gray areagreater than 2.6 healthy
A Z-score of 1.1 or less does not mean the
company is bankrupt, but does suggest thatfinancial problems may exist
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Bond Ratings
Bond rating agencies include Standard &Poors & Moodys
Corporations are expected to haveinvestment grade ratings, Baa and above(for Moodys)
Bond ratings below investment grade are
junk bonds, which is usually recognized asa red flag
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Bond Ratings
S & P Moodys Category
Highest AAA Aaa Investment
Very High AA Aa InvestmentHigh Qual. A A Investment
High Qual. BBB Baa Investment
Speculative BB Ba BelowSpeculative B B Below
Speculative CCC Caa Below
Speculative D C Below
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Chapter 12
Credit Analysis
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Credit Analysis Process
Loan Purpose
Corporate Overview
Financial Analysis
Accounting Analysis
Comprehensive Analysis
Loan Decision
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Loan Purpose
Commercial Bank Loan:
term loan
revolving line of creditother
Commercial Paper
Corporate Bonds
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Corporate Overview
Wide variety of firms need bank loans
Size characteristicslocal or regional to
national & global Industry specializations, including impact
on bank credit risk
Large companies have more credit options
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Quantitative Financial Analysis
Primary focus is on financial report
analysis, with less emphasis on market
information Particular interest in liquidity & leverage
Evidence of financial health (as measured
by credit risk) rather than earningsperformance & forecasts
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Accounting Analysis
Emphasis on liquidity & cash flow
information
Analysis of unrecorded obligations &potential overstated assets
Forecasts of sales & operations plus future
cash flows
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Comprehensive Analysis
Summary of key information (executive
summary recommended)
Importance of credit risk Adequate information to make informed
recommendations/decisions
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Loan Decisions
Yes/ No on loan
What interest rate (prime rate +)?
What collateral? What Debt covenants?
Other considerations (e.g., compensating
balances)
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Chapter 13Equity Investment Analysis
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Investment Portfolio
Importance of Portfolio Diversification
Based on Investor Goals
Short-term, liquidity focus Mid-term, return but limited risk focus
Long-term, return focus
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Mutual Funds
Investment portfolios managed by
professionals & regulated by the SEC
Advantages: diversification, professionalmanagement, liquidity, small investment
Disadvantages: Fees, average returns less
than expected, lack of control overinvestments, taxes
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Mutual Fund Categories
Money Market Funds
Bond
Stock: growth, income, value, assetallocation, international, sector, regional
Balanced
Real estate, usually REITs
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Gotrocks Funds
Growth Fund: maximize long-term market appreciationusing large-cap stocks (focus on earnings & earningsgrowth potential)
Income Fund: maximize intermediate- & long-term incomeusing bonds and large-cap stock that pay high dividends (+total return as a secondary goal)
Value Fund: invest in large-cap stocks that out of favorrequires evidence of substantial stock price drop &
ongoing restructuring (usually low market-to-book)
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Investment Strategies
Buy & hold
Index funds
Dollar-cost averaging Risk measures, such as Beta analysis
Asset allocation decisions; e.g., % of cash,
bonds & stocks
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Six-step Analysis
Investment purpose
Corporate overview
Quantitative financial & market analysis Detailed accounting analysis
Comprehensive analysis
Recommendation or decision
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Investment Purpose
Short-term (stressing liquidity & low risk)
Long-term (e.g., retirementstressing long-
term return, willing to accept more risk) Using market averages such as the Dow Jones
Industrial Average
Utilities may fit income funds because of high
dividend yields
High tech firms may fit growth funds
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Decisions
Decisions: buy, sell, hold (& how much?)
Different important characteristics based on
investment goals:Income Investment: importance of
dividend yield
Growth fund: importance of profit &
earnings growth forecastValues funds: importance of bargain