財務報表分析與運用杰拉爾德課后答案英文版第三章

1、財務報表分析與運用杰拉爾德課后答案英文版第三章Chapter 3 - Soluti onsOverview:Problem Len gth SMLProblem #1,32, 7, 8, 12, 134 - 6, 9 - 11, 14, 151.Sa.Palomba Pizza Stores Stateme nt of Cash Flows Year En ded December 31,2000Cash Flows from Operati ng Activities:Cash Collectio ns from CustomersCash Payme nts to SuppliersCas

2、h Payme nts for SalariesCash Payme nts for In terestNet Cash from Operati ng Activities Cash Flows from In vesti ng Activities:Sales of Equipme ntPurchase of Equipme ntPurchase of LandNet Cash for Inv esti ng Activities Cash Flows from Financing Activities:Retireme nt of Common StockPayme nt of Divi

3、de ndsNet Cash for Financing Activities Net In crease in CashCash at Begi nning of YearCash at End of Year$ 250,000(85,000)(45,000)(10,000)38,000(30,000)(14,000)(25,000)(35,000)$ 110,000(6,000)(60,000)$ 44,00050,000$_94,000b. Cash Flow from Operati ons (CFO) measures the gen erati ng ability ofopera

4、ti ons,inadditi onprofitability. If used as a measure of performa nee, CFO is less subject to distortio n tha n net in come. An alysts use the CFO as although it is with high netcashtoearnin gs, Compa nies and low CFO may be usinga check on the quality of reportednot a substitute for net in come.in

5、comeaggressive in come recog niti on tech niq ues. The ability ofoverlya firm to gen erate cash from operati ons on a con siste nt basis is one indication of the financial health of the firm.Analystssearch for trends in CFO to indicatefuturecashcon diti onsand pote ntialliquidityorsolve ncyproblems.

6、Cash Flow from InvestingActivities (CFI) reports how thefirm is inv esti ngits excess cash. The an alystmustcon sider the ability of the firm to con ti nue to grow andCFI is a good indicationof the attitude ofmanagement inthis area. This componentof total cash flow includes thecapital expe nditures

7、made by man ageme nt to maintain and expa ndproductive capacity. Decreas ing CFI may be aforecast of slower future growth.or equityprefere ncesand in terest earnings perCash Flow from Financing (CFF) in dicates the sources of financing for the firm. For firms that require exter nal sources of financ

8、ing (either borrow ing financing)itcom muni catesman ageme ntsregarding financial leverage. Debt financing indicates future cash requireme nts forprin cipalpayme nts. Equity financing will cause future share diluti on.For firms whose operati ng cash flow exceeds in vestme ntneeds,CFF indicateswhethe

9、r that excess is used to repaydebt, pay (orin crease)cash divide nds, or repurchaseoutsta nding shares.c.Cash payments for interestshould be classified as CFF forpurposes of an alysis. This classificati on separates the effect of finan cialleveragedecisi onsfrom operat ingresults. It also facilitate

10、s the comparison of Palomba with other firms whose finan cial leverage differs.d.The change in cash has no analyticsignificanee.The changein cash (and hence, the cash balanee at the end of the year) is a product of management decisions regarding financing. For example, the firm can show a large cash

11、 bala nee by draw ing on bank lines just prior to year end.e.and f.There are a nu mber of defi niti ons of free cash flows. In the operatio ns required capacity.text, free cashless thetomai ntai nThis defi niti onflow is amount of the firm requiresdefi ned capital scurre ntthe exclusi onas cash from

12、 expe nditures productive of costsof expenditures incurred to Capital costs of acquisitionsmain tai n may beof growth and acquisiti ons. However, few firms provide separate disclosures productive capacity.obta ined from proxy stateme nts and other disclosures of acquisiti ons (See Chapter 14).In the

13、 finance literature, free cash flows available to equity holders are oftenmeasured as cash from operationsless capital expe nditures. In terest paid is a deducti on when comput ingcash fromoperati onsas it is paid tocreditors. Palomba s free cash flow available to equity holders is calculated as fol

14、lows:Net cash flow from operatingactivities less net cash forinv est ing activities:$110,000 - $6,000 = $104,000The investmentactivities disclosed in the problem do notin dicate any acquisiti ons.Ano ther defi niti on of free cash flows, which focuses onfree cash flow available to all providers of c

15、apital, would exclude payments for interest ($10,000 in this case) anddebt. Thus,Palomba s free cash flow available to allproviders of capital would be $114,000.2.Ma.199619971998199920002001Sales$ -$ 140$150$165$175$195Bad debt expense7781010Net receivables304050607595Cash collect ions1$ -$ 123$133$

16、147$150$1651 Sales - bad debt expe nse - in crease in net receivablesb.19971998199920002001Bad debt expe nse/sales5.0%4.7%4.9%5.7%5.1%Net receivables/sales28.633.336.442.848.7Cash collect ion s/sales87.988.789.185.784.6c. The bad debt provisiondoes not seem to be adequate. From1997 - 2001 sales in c

17、reased by approximately 40%, whilenet receivables moretha ndoubled,in dicati ngthatcollect ions have bee n lagg ing. The ratios calculated in part b also in dicate the problem. While bad debt expe nsehas remained fairlyconstant at 5% of sales over the 5 yearperiod, net receivables as a percentageof

18、sales havein creased from 29% to 49%; cash collect ions relative toOther possible payme nt terms customerssales have declined. data are that stated Sten gelhas allowedcompetitive reas ons.expla nati onsfor thesehave lengthened or thatto delay payme nt for3.SNiagara Compa nyStateme nt of Cash Flows 2

19、001Cash collect ionsCash in putsCash expe nsesCash in terest paid In come taxes paidCash from Operati onsPurchase of fixed assets Cash Used for Inv est ingIn crease in LT debt Decrease in no tes payable Divide nds paidCash Used for Financing Net Change in CashCash Bala nee 12/31/00 Cash Bala nee 12/

20、31/01$ 980(670) (75)(40)(30)Sales -Acco unts ReceivableCOGS +Inven torySelli ng & Gen eral Expe nse -Acco unts Payable1In terest Expe nse -In terest PayableIn come Tax Expe nse -Deferred TaxDepreciati on Expe nse +Fixed Assets (n et)Net In come -Reta ined earnin gs$ 165(150) 715050(25)(30)(5)$ 1050$

21、 601 Can also be used to calculate cash in puts, decreas ing that outflow to $645 while in creas ing cash expe nses to $100.3-54.La.G Compa nyIn come Stateme nt, 2000 ($ thousa nds)SalesCOGS + operat ing$ 3,8413,651receipts from customers + in crease in acco unts receivablepayments- increaseininvent

22、ory+expenses Depreciati on In terest TaxesNet in come154142 $ 92in crease in acco unts payablein crease in accumulated depreciati onpayme ntspayme nt + in crease in tax payable check = cha nge in reta ined earnings as there are no divide nds1 Note that these two items cannot be calculated separately

23、 from the information available.b. M Compa nyCash Receipts and Disburseme nts, 2000 ($ thousa nds)Cash receipts from: Customers$ 1,807Sales - i ncrease in receivablesIssue of stock3In crease in acco untShort-term debt62in crease in liabilityLon g-term debt96In crease in liabilityTotal$ 1,968Cash dis

24、burseme nts:COGS and operat ing$ 1,843COGS + operat ing expe nse + in creaseexpensesin inven tory + decrease in acco unts payableTaxes3Expe nse - in crease in tax payableIn terest51Expe nseDivide nds22in come+in creaseinretainedearnin gsPP&E purchase33Cha nge in PP&ETotal$ 1,952Change in cash$ 16Not

25、e : This is not a true receipts and disbursements schedule as it shows certain amounts (e.g., debt) on a net basis rather than gross. Such schedules (and cash flow stateme nts) prepared from published data can only show some amounts n et,uni esssuppleme ntarydata areavailable.c.The cash flow stateme

26、 nts are prese nted with the in come statement for comparison purposes in answering Part d.M Compa ny: Stateme nt of Cash Flows ($ thousa nds)19961997199819992000CFO:From customers$1,165$1,210$1,327$1,587$1,807Less outlays for:COGS/oper. exp.1,1301,1871,3261,6721,843In terest1519162151 1Taxes2319993

27、$ (3)$ (15)$ (24)$ (115)$ (90)CFI:PP&E purchase(14)(17)(37)(30)(33)CFF:Issue of stock55833Short-term debt6465-15362 1Lon g-term debt-100-96 1Divide nds(20)(21)(21)(21)(22)Stock repurchase(22)(14)-(10)-LT debt repaid(2)(2)-ST debt repaid-$ 25$ 33$ 76$ 125$ 139Change in cash8115(20)16 |M Compa ny: In

28、come Stateme nt ($ thousa nds)19961997199819992000Sales$ 1,220$ 1,265$ 1,384$ 1,655$ 1,861COGS8188439311,1251,277Operat ing expe nse298320363434504Depreciati on910111214In terest1519162151.Taxes383327266Total$ 1,178$ 1,225$ 1,348$ 1,852$ 1,852Net In come424036.379G Compa ny: Stateme nt of Cash Flows

29、 ($ thousa nds)19961997199819992000CFO:From customers$1,110$1,659$2,163$2,809$3,679Disburseme nts:COGS/Oper. exp.1,2141,7021,7022,8953,778In terest1113232941 1Taxes1315162935 |$ (128)$ (71)$ (93)$ (144)$ (175)CFI:PP&E purchase(20)(10)CFF:Issue of stock1054530 1Short-term debt805291360 1Lon g-term de

30、bt40232012550 1$ 130$ 75$ 116$ 173$ 140_ IChange in cash$ 2$ 4$ 3$ 19$ 35G Compa ny-I ncome Stateme nt($ thousa nds)19961997199819992000Sales$ 1,339$ 1,731$ 2,261$ 2,939$ 3,84COGS1,0391,3341,7432,267-Operat ing expe nse2433123985243,651Depreciati on1010121415In terest1113232941Taxes1320273142Total$

31、1,316$ 1,689$ 2,203$ 2,865$ 3,749Net in come$ 23$ 42$ 58$74$92Note:2000 COGS andoperati ngexpenseare comb ined asthereisinsufficient information to separate them.d. Bothcompa niesare credit risks. Although both areprofitable, their CFO is increasinglynegative.If currenttrends con ti nue they face po

32、ssible in solve ncy. However, before reject ing both loa ns outright, it is importa nt to know whether CFO and in come differ because the compa nies are doing poorly or because they are grow ing too fast.Both compa nies in creased sales over the 5 year period;Compa ny M by 50%, Compa ny G by more th

33、an 300%. Are these sales real (will cash collect ions materialize)? If they are growi ng too fast, it may be advisable to make the loan but also to force the compa ny to curtail its growth un til CFO catches up. One way to verify whether the gap is the result of sales to poor credit risks is to chec

34、k if the growth in receivables is proporti on alto the salesgrowth. Similar checkscan be made for the growth ininven tories and payables. In this case, the inven tory ofM company hasdoubledfrom 1996 to 2000 whileCOGSin creasedby only 56%. The inven toryin crease would be onearea to inv estigate furt

35、her.There is a sig nifica ntdiffere nee in theinv estme ntpatternof the two companies. Company M has made purchasesof PPE each year, while Company G has made little net investmentin PPE over the period. Yet Company G has grownmuch faster. Does this reflect the n atureof the bus in ess(Company G is m

36、uch less capitalintensive)or has CompanyG used off bala nee sheet financing tech niq ues?The cash from financingpatter nsof the two compa niesalsodiffer. Both tripled their total debt over the period and in creasedthe ratio of total debt to equity.Give n Compa nyMs slower growth (in sales and equity

37、), its debt burde n has grow n much more rapidly. Despite this, Compa ny M has continued to pay divide nds and repurchase stock. Compa nyG has not paid divide ndsand has issued new equity. Thesetwo factorsacco untfor its larger in crease in equity from1996 to 2000.to decli ning inv estigati on shoul

38、d preferon toBased only on the finan cial data provided, G looks like the better credit risk. Its sales and in come are grow ing rapidly, while Msin comeis stablemodestlygrow ingsales. Un less furthercha nges the in sightsdiscussed here, youlend to Compa ny G.5.La. (i)Stateme nt of Cash Flows - In d

39、irect MethodCash from operati ons:Net in comeAdd non cash expe nse: depreciati onAdd/Subtract cha nges in work ing capital:Acco unts receivableInven toryAccrualsAcco unts payable(150)(200)80120$1,080600(150)$1,5301,150550(398)(432) _ $(280)$ 100Cash from inv est ing: Capital expe ndituresCash from f

40、inancing: Short term borrow ing Lon g-term repayme nt Divide ndsNet cha nge in cashWorksheet for (I ndirect Method) Cash Flow Stateme ntIn come Stateme ntBala nee Sheet 12/31/00 12/31/01ChangeCa; Effecsh ;tNet in come$1,080$1,08(0Depreciati on600600Acco unts receivable$1,500$1,650$150(150：Inven tory

41、2,0002,200200(200：Accruals8008808080Acco unts payable1,2001,320120120Depreciati on(600)(600：Net fixed assets6,5007,050550(550、Capital expe nditures$(1,150)Note payable5,5006,050550550Short-term borrowi ng$ 550Lon g-term debt2,0001,602(398)(398)Lon g-term debt repayme nt$ (398)Net in come(1,080)(1,08

42、C)Reta ined earnings5001,148648648Divide nds paid$ (432)0$ 100The worksheet to create the cash flow stateme nt is prese ntedabove. Each balanee sheet change (other than cash) is accounted for and matched with its correspondingactivity. As a lastcheck, the net in come and the add-backs of non-cash it

43、ems arebalaneed and“closed ” to their respective accounts (PP&E andreta inedearnin gs)providi ng the amounts of capitalexpe nditures and divide nds.a. (ii) Stateme nt of Cash Flows - Direct MethodCash from Operati ons:Cash collecti ons$9,850Cash payme nts for mercha ndise(6,080)Cash paid for SG&A(92

44、0)Cash paid for in terest(600)Cash paid for taxes(720)$1,530Cash for In vest ing Activities:Capital expe nditures(1,150)Cash for Financing Activities:Short-term borrow ing550Lon g-term debt repayme nt(398)Divide nds(432)$( 280)Net Change in Cash$ 100acco un tedto theirprovid ingThe worksheet to crea

45、te the cash flow stateme nt is prese nted below. Each balanee sheet change (otherthan cash) isfor and matched with its corresp onding activity. Furthermore theoperat ingacco untcha ngesare matchedcorresp onding in come stateme nt item. As a last check, the net in come is bala needand “ closed ” to r

46、etai ned earningsthe amount of divide nds.Note that there is no differenee methods in the cash flow statement for investing and financing activities,betwee n the in directand in the worksheetand directfor cashWorksheet for (Direct Method) Cash Flow Stateme ntSalesAcco unts receivableIn comeStateme n

47、t 1 $10,000Bala nee SheetChange$ 150Cash Effect $10,000 (150)2/31/00$ 1,50012/31/01 ($ 1,650Cash Collect ions$ 9,85(COGS(6,000)(6,000)Inven tory2,0002,200200(200Acco unts payable1,2001,320120120Cash Paid for Mercha ndise$(6,080)SG&A expe nse(1,000)(1,000)Accruals8008808080Cash Paid for SG&A$ (92C)In

48、 terest expe nse(600)(600；Cash Paid for In terest$ (600)Taxes(720)(720：Cash Paid for Taxes$ (720)Depreciati on(600)(600；Net fixed assets6,5007,050550(550】Capital Expe nditures$(1,150)Note payable5,5006,050550550Short-term Borrow ing$ 550Lon g-term debt2,0001,602(398)(398)Long-term Debt Repaid$ (398)

49、Net in come(1,080)(1,080)Reta ined earnings5001,148648648Divide nds$ (432)$ 0$ 1006.La.Exhibit 3P-3 does not provide the (cha nges in the)in dividualcomp onents that make up the cha nges in work ingcapital. As such, to create the direct method cash flow stateme nt, we must obta in the in formatio n

50、directly from the bala nee sheet. This procedure does not n ecessarily yield the same cash flow components using the direct method as those provided by the compa ny in its in direct method calculati ons. Differe nces may arise whe n1. there are acquisitio ns/divestme nts2. there are foreig n excha nge adjustme nts3. the firm aggregates or classifiesinvestingaccrualstogether with operati ng on es.flow stateme nt are used to gen erateIn this case, the differences are minimal as in