1、McGraw-Hill/IrwinCopyright 2009 by The McGraw-Hill Companies,Inc.All rights reserved.Financial Statement AnalysisK R SubramanyamJohn J WildCase-2CCCHAPTERApplying Financial Statement AnalysisCase-3Steps in Analyzing Financial Statements Explicitly define the analysis objectives Formulate specific qu
2、estions and criteria consistent with the analysis objectives Identify the most effective and efficient tools of analysis Interpret the evidenceCase-4Building Blocks of Financial Statement AnalysisSix areas of inquirywith varying degrees of importance:1.Short-term liquidity.2.Capital structure and so
3、lvency.3.Return on invested capital.4.Asset turnover.5.Operating performance and profitability.6.Forecasting and valuation.Applying the building blocks to financial statement analysis involves determining:Objectives of the analysis.Relative emphasis among the building blocks.Case-5Reporting on Finan
4、cial Statement AnalysisA good analysis report typically contains at least six sections devoted to:Executive summary.Brief summary focused on important analysis results;it launches the analysis report.Analysis overview.Background material on the company,its industry,and its economic environment.Evide
5、ntial matter.Financial statements and information used in the analysis.Assumptions.Identification of important assumptions regarding a companys industry and business environment,and other important assumptions for estimates and forecasts,including its business strategy.Crucial factors.Listing of imp
6、ortant favorable and unfavorable factors,both quantitative and qualitative.Inferences.Includes forecasts,estimates,interpretations,and conclusions drawing on all prior sections of the report.Case-6Specialization in Financial Statement Analysis Analysis usually viewed from the perspective of a“typica
7、l”company Recognizing the existence of several distinct factors Special industry conditions Government regulations Social concerns Political visibility Understanding accounting peculiaritiesCase-7Case:Campbell Soup Co.Preliminary Financial AnalysisCase-8Comparative Financial StatementsExhibit CC.2CA
8、MPBELL SOUP COMPANYIncome Statements(millions)Year 11Year 10Year 9Year 8Year 7Year 6Net sales$6,204.1$6,205.8$5,672.1$4,868.9$4,490.4$4,286.8Costs and expenses:Cost of products sold$4,095.5$4,258.2$4,001.6$3,392.8$3,180.5$3,082.7Marketing and selling expenses956.2980.5818.8733.3626.2544.4Administrat
9、ive expenses306.7290.7252.1232.6213.9195.9Research and development expenses56.353.747.746.944.842.2Interest expense116.2111.694.153.951.756.0Interest income(26.0)(17.6)(38.3)(33.2)(29.5)(27.4)Foreign exchange losses,net0.83.319.316.64.80.7Other expense(income)26.214.732.4(3.2)(9.5)5.5Divestitures,re
10、structuring,&unusual charges0.0339.1343.040.60.00.0Total costs and expenses$5,531.9$6,034.2$5,570.7$4,480.3$4,082.9$3,900.0Earnings before equity in affil.&M.I.$672.2$171.6$101.4$388.6$407.5$386.8Equity in earnings of affiliates2.413.510.46.315.14.Minority interests(7.2)(5.7)(5.3)(6.3)(4.7)(3.9)Earn
11、ings before taxes$667.4$179.4$106.5$388.6$417.9$387.2Taxes on earnings265.9175.093.4147.0170.6164.0Earnings before cumulative effect$401.5$4.4$13.1$241.6$247.3$223.2Cumulative effect of change for taxes00032.500Net earnings$401.5$4.4$13.1$274.1$247.3$223.2Earnings per share$3.16$0.03$0.10$2.12*$1.90
12、$1.72Weighted-average shares outstanding127.00126.60129.30$129.30$129.90129.50Case:Campbell Soup Co.Case-9Comparative Financial StatementsCase:Campbell Soup Co.Exhibit CC.3CAMPBELL SOUP COMPANYBalance SheetsYear11Year 10Year 9Year 8Year 7Year 6AssetsCurrent assets:Cash and cash equivalents$178.90$80
13、.70$120.90$85.80$145.00$155.10Other temporary investments12.8022.5026.2035.00280.30238.70Accounts receivable527.40624.50538.00486.90338.90299.00Inventories706.70819.80816.00664.70623.60610.50Prepaid expenses92.70118.00100.4090.5050.1031.50Total current assets$1,518.50$1,665.50$1,601.50$1,362.90$1,43
14、7.90$1,334.80Plant assets,net of depreciation$1,790.40$1,717.70$1,540.60$1,508.90$1,349.00$1,168.10Intangible assets,net of amortization435.50383.40466.90496.60 Other assets404.60349.00323.10241.20310.50259.90Total assets$4,149.00$4,115.60$3,932.10$3,609.60$3,097.40$2,762.80Liabilities and Shareowne
15、rs EquityCurrent liabilities:Notes payable$282.20$202.30$271.50$138.00$93.50$88.90Payable to suppliers and others482.40525.20508.20446.70374.80321.70Accrued liabilities408.70491.90392.60236.90182.10165.90Dividend payable37.0032.3029.70 Accrued income taxes67.7046.4030.1041.7043.4049.60Total current
16、liabilities$1,278.00$1,298.10$1,232.10$863.30$693.80$626.10Long-term debt$772.60$805.80$629.20$525.80$380.20$362.30Other liabilities,mainly deferred tax305.00319.90292.50325.50287.30235.50Shareowners equity:Preferred stock;authorized 40,000,000 sh.;none issued Capital stock,$0.15 par value;authorize
17、d 140,000,000 sh.;issued 135,622,676 sh.20.3020.3020.3020.30 20.3020.30Capital surplus107.3061.9050.8042.3041.1038.10Earnings retained in the business1,912.601,653.301,775.801,879.101,709.601,554.00Capital stock in treasury,at cost(270.40)(107.20)(70.70)(75.20)(46.80)(48.40)Cumulative translation ad
18、justments23.6063.502.1028.5011.90(25.10)Total shareowners equity$1,793.40$1,691.80$1,778.30$1,895.00$1,736.10$1,538.90Total liabilities and shareowners equity$4,149.00$4,115.60$3,932.10$3,609.60$3,097.40$2,762.80Case-10Comparative Financial StatementsCase:Campbell Soup Co.Exhibit CC.4CAMPBELL SOUP C
19、OMPANYStatements of Cash FlowsFor Years 6 to 11($millions)Year 11Year 10Year 9Year 8Year 7Year 6TotalCash flows from operating activities:Net earnings$401.5$4.4$13.1$274.1$247.3$223.2$1,163.6To reconcile net earnings to net cash provided by operating activities:Depreciation and amortization208.6200.
20、9192.3170.9144.6126.81,044.1Divestitures and restructuring provisions 339.1343.017.6 699.7Deferred taxes35.53.9(67.8)13.445.729.059.7Other,net63.218.637.343.028.016.6206.7Cumulative effect of accounting change (32.5)(32.5)(Increase)decrease in accounts receivable17.1(60.4)(46.8)(104.3)(36.3)(3.6)(23
21、4.3)(Increase)decrease in inventories48.710.7(113.2)54.2(3.9)23.119.6Net change in other current assets and liabilities30.6(68.8)(0.6)30.242.948.783.0Net cash provided by operating activities$805.2$448.4$357.3$466.6$468.3$463.8$3,009.6Cash flows from investing activities:Purchases of plant assets$(3
22、61.1)$(387.6)$(284.1)$(245.3)$(303.7)$(235.3)$(1,817.1)Sale of plant assets43.234.939.822.6 29.8170.3Businesses acquired(180.1)(41.6)(135.8)(471.9)(7.3)(20.0)(856.7)Sale of businesses67.421.74.923.520.8 138.3Increase in other assets(57.8)(18.6)(107.0)(40.3)(50.1)(18.0)(291.8)Net change in other temp
23、orary investments9.73.79.0249.2(60.7)(144.1)66.8Net cash used in investing activities$(478.7)$(387.5)$(473.2)$(462.2)$(401.0)$(387.6)$(2,590.2)Cash flows from financing activities:Long-term borrowings$402.8$12.6$126.5$103.0$4.8$203.9$853.6Repayments of long-term borrowings(129.9)(22.5)(53.6)(22.9)(2
24、3.9)(164.7)(417.5)Increase(decrease)in short-term borrowings*(137.9)(2.7)108.28.4(20.7)4.6(40.1)Other short-term borrowings117.3153.7227.177.089.372.9737.3Repayments of other short-term borrowings(206.4)(89.8)(192.3)(87.6)(66.3)(88.5)(730.9)Dividends paid(137.5)(124.3)(86.7)(104.6)(91.7)(104.6)(649.
25、4)Treasury stock purchases(175.6)(41.1)(8.1)(29.3)(254.1)Treasury stock issued47.712.418.50.91.64.085.1Other,net(0.1)(0.1)23.52.318.617.962.1Net cash provided(used in)financing activities$(219.6)$(101.8)$163.1$(52.8)$(88.3)$(54.5)$(353.9)Effect of exchange rate change on cash$(8.7)$0.7$(12.1)$(10.8)
26、$(7.1)$(3.7)$(41.7)Net increase(decrease)in cash and cash equivalents98.2(40.2)35.1(59.2)(28.1)18.023.8Cash and cash equivalents at the beginning of year80.7120.985.8145.0173.1155.1155.1Cash and cash equivalents at end of year$178.9$80.7$120.9$85.8$145.0$173.1$178.9Case-11Case:Campbell Soup Co.-Comp
27、arative Financial StatementsCase-12Case:Campbell Soup Co.-Further AnalysisCase-13Case:Campbell Soup Co.-Further AnalysisExhibit CC.6CAMPBELL SOUP COMPANYCommon-Size Income StatementsYear 11Year 10Year 9 Year 8Year 7Year 6Net sales 100.00%100.00%100.00%100.00%100.00%100.00%Costs and expenses:Cost of
28、products sold 66.01%68.62%70.55%69.68%70.83%71.91%Marketing and selling expenses 15.4115.8014.4415.0613.9512.70Administrative expenses4.944.684.444.784.764.57Research and development expenses 0.910.870.840.961.000.98Interest expense1.871.801.661.111.151.31Interest income(0.42)(0.28)(0.68)(0.68)(0.66
29、)(0.64)Foreign exchange losses,net 0.010.050.340.340.110.02Other expense(income)0.420.240.57(0.07)(0.21)0.13Divestitures,restructuring&unusual charges 5.466.050.83 Total costs and expenses 89.17%97.23%98.21%92.02%90.93%90.98%Earnings before equity in earnings of affiliates and minority interests 10.
30、83%2.77%1.79%7.98%9.07%9.02%Equity in earnings of affiliates 0.04 0.220.180.130.340.10Minority interests(0.12)(0.09)(0.09)(0.13)(0.10)(0.09)Earnings before taxes10.76%2.89%1.88%7.98%9.31%9.03%Taxes on earnings4.292.821.653.023.803.83Earnings before cumulative effect of accounting change6.47%0.07%0.2
31、3%4.96%5.51%5.21%Cumulative effect of change in accounting for income taxes 0.67 Net earnings6.47%0.07%0.23%5.63%5.51%5.21%Case-14Case:Campbell Soup Co.-Further AnalysisExhibit CC.7CAMPBELL SOUP COMPANYCommon-Size Balance SheetsYear 11Year 10Year 9Year 8Year 7Year 6Industry Composite Year 11Current
32、assets:Cash and cash equivalents4.31%1.96%3.07%2.38%4.69%5.61%3.4%Other temporary investments0.310.550.670.979.058.64Accounts receivable12.7115.1713.6813.4910.9410.8216.5Inventories17.0319.9220.7518.4120.1322.1038.6Prepaid expenses2.232.872.552.511.621.142.2Total current assets36.60%40.47%40.73%37.7
33、6%46.43%48.31%60.70%Plant assets,net of depreciation43.15%41.74%39.18%41.80%43.55%42.28%21.0%Intangible assets,net of amortization10.509.3211.8713.76 Other assets9.758.488.226.6810.029.4118.3Total assets100.00%100.00%100.00%100.00%100.00%100.00%100.00%Current liabilities:Notes payable6.80%4.92%6.90%
34、3.82%3.02%3.22%6.7%Payable to suppliers and others11.6312.7612.9212.3812.1011.6410.2Accrued liabilities9.8511.959.986.565.886.0015.8Dividend payable0.890.780.76 Accrued income taxes1.631.130.771.161.401.80Total current liabilities30.80%31.54%31.33%23.92%22.40%22.66%32.70%Long-term debt18.62%19.58%16
35、.00%14.57%12.27%13.11%19.7%Other liabilities,mainly deferred taxes7.357.777.449.029.288.521.5Shareowners equity:Preferred stock;auth 40,000,000 sh.;none issued Capital stock,$0.15 par value;authorized 140,000,000 sh.;issued 135,622,676 sh.0.490.490.520.56 0.660.73Capital surplus2.591.501.291.171.331
36、.38Earnings retained in the business46.1040.1745.1652.0655.1956.25Capital stock in treasury,at cost6.522.601.80 2.081.511.75Cumulative translation adjustments0.571.540.050.790.380.91Total shareowners equity43.22%41.11%45.23%52.50%56.05%55.70%46.10%Total liabilities and equity100.00%100.00%100.00%100
37、.00%100.00%100.00%100.00%Case-15Case:Campbell Soup Co.-Further AnalysisExhibit CC.8CAMPBELL SOUP COMPANYTrend Index of Selected Accounts(Year 6=100)Year 11Year 10Year 9Year 8Year 7Year 6 Cash and cash equivalents115%52%78%55%93%$155.1 Accounts receivable176209180163113299.0 Temporary investments5911
38、15117238.7 Inventory116134134109102610.5 Total current assets1141251201021081,334.8 Total current liabilities204207197138111626.1 Working capital34525270105708.7 Plant assets,net1531471321291151,168.1 Other assets15613412493119259.9 Long-term debt213222174145105362.3 Total liabilities192198176140111
39、1,223.9 Shareowners equity1171101161231131,538.9 Net sales1451451321141054,268.8 Cost of products sold1331381301101033,082.7 Admin.and research expenses157148129119109195.9 Marketing and sales expenses176180150135115544.4 Interest expense19919116110410158.5 Total costs and expenses1421551431151053,9
40、00.0 Earnings before taxes1724628100108387.2 Net income1802*6*123111223.2Case-16Case:Campbell Soup Co.-Further AnalysisExhibit CC.9CAMPBELL SOUP COMPANYPer Share ResultsYear 11Year 10 Year 9Year 8Year 7Year 6 Sales$48.85$47.88$43.87$37.63$34.57$33.10 Net income3.160.030.102.121.901.72 Dividends1.120
41、.980.900.810.710.65 Book value14.1213.0913.7614.6913.3511.86 Average shares 127.0129.6129.3129.4129.9129.5 outstanding(mil)Case-17Case:Campbell Soup Co.-Further AnalysisExhibit CC.10CAMPBELL SOUP COMPANYCommon-Size Statements of Cash Flows*Year 11Year 10Year 9Year 8Year 7Year 6Total Cash flows from
42、operating activities:Net earnings26.89%0.54%1.15%25.14%38.42%27.88%21.54%To reconcile net earnings to net cash provided by operating activities:Depreciation and amortization13.9724.5816.8215.6722.4715.8419.33Divestitures and restructuring provisions 41.4930.001.61 12.95Deferred taxes2.380.48(5.93)1.
43、237.103.621.11Other,net4.232.283.263.944.352.073.83Cumulative effect of accounting change (2.98)(0.60)(Increase)decrease in accounts receivable 1.15(7.39)(4.09)(9.57)(5.64)(0.45)(4.34)(Increase)decrease in inventories3.261.31(9.90)4.97(0.61)2.890.36Net change in other current assets&liabilities 2.05
44、(8.42)(0.05)2.776.676.081.54Net cash provided by operating activities 53.92%54.86%31.25%42.80%72.76%57.94%55.72%Cash flows from investing activities:Purchase of plant assets(24.18)%(47.42)%(24.85)%(22.50)%(47.19)%(29.39)%(33.64)%Sale of plant assets2.894.273.482.07 3.723.15Businesses acquired(12.06)
45、(5.09)(11.88)(43.28)(1.13)(2.50)(15.86)Sale of businesses4.512.660.432.163.23 2.56Increase in other assets(3.87)(2.28)(9.36)(3.70)(7.78)(2.25)(5.40)Net change in other temporary investments 0.650.45 0.7922.86 (9.43)(18.00)1.24Net cash used in investing activities(32.06)%(47.41)%(41.39)%(42.39)%(62.3
46、1)%(48.42)%(47.95)%Cash flows from financing activities:Long-term borrowings26.97%1.54%11.07%9.45%0.75%25.47%15.80%Repayments of long-term borrowings(8.70)(2.75)(4.69)(2.10)(3.71)(20.57)(7.73)Increase(decrease)in short-term borrowings(9.23)(0.33)9.460.77(3.22)0.57(0.74)Other short-term borrowings7.8
47、618.8119.877.0613.889.1113.65Repayments of other short-term borrowings(13.82)(10.99)(16.82)(8.03)(10.30)(11.06)(13.53)Dividends paid(9.21)(15.21)(7.58)(9.59)(14.25)(13.07)(12.02)Treasury stock purchases(11.76)(5.03)(0.71)(2.69)(4.70)Treasury stock issued3.191.521.620.080.250.501.58Other,net (0.01)(0
48、.01)2.06 0.21 2.89 2.24 1.15Net cash provided(used in)financing activities(14.71)%(12.46)%14.27%(4.84)%(13.72)%(6.81)%(6.55)%Effect of exchange rate change on cash(0.58)%0.09%(1.06)%(0.99)%(1.10)%(0.46)%(0.77)%Net increase(decrease)in cash&equivalents6.58(4.92)3.07(5.43)(4.37)2.250.44Case-18Case:Cam
49、pbell Soup Co.Chart of summary cash inflows and cash outflows:Cash Flow Analysis and ForecastingCase-19Case:Campbell Soup Co.Cash Flow Analysis and ForecastingExhibit CC.11CAMPBELL SOUP COMPANYAnalysis of Cash Flow Ratios($millions)(1)(2)%7.11708.7 259.9 2,089.1104.6-463.8 6Year%0.11744.1 310.5 2,35
50、5.191.7-468.3 7Year 11.0%499.6 241.2 2,539.7104.6-466.6 8Year%4.8369.4 323.1 2,543.086.7-357.39Year 9.4%367.4 349.0 2,734.9 124.3-448.4 10Year 18.7%240.5 404.6 2,921.9137.5-805.2 11Year 11.8%2,929.7 1,888.3 15,183.7649.4-3,009.6average 11Year to6Year capital Working assetsOther sInvestment PPE Gross
