Download - Lecture 1_Overview on Financial Analysis_1

8/9/2019 Lecture 1_Overview on Financial Analysis_1

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

OVERVIEW ON

FINANCIAL ANALYSIS


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Objective and Content

Objective:- To understand what financial analysis is

- To understand i!ortance of financial analysis

- To understand !rocess of financial analysis

Content:What is financial analysis"Fraewor# of financial analysis

Tools and techni$ues used in financial analysis


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What is inancia! ana!"sis#

Financial stateent analysis is the !rocess of a!

analytical tools to a co!any&s financial statee

understand the co!any&s financial health and to

decisions'

It re$uires financial inforation( standard co!a

analysis tools'


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$otentia! Financia! State%ent Use&s

Mana'e&s (i&ecto&

C&edito&sInv

)ove&n%ent

What t"*es o +,estionsdo each o these ,se&ssee- ans.e&s to#


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Use&s o State%ent /na!"sis

T&ade C&edito&s) Focus onthe li$uidity of the fir'

0ondho!de&s) Focus on thelon%*ter cash flow of the

fir'

Sha&eho!de&s:Focus onthe !rofita+ility and lon%*

ter health of the fir'

T&ade C&edito&s) Focus onthe li$uidity of the fir'

0ondho!de&s)Focus on thelon%*ter cash flow of the

fir'

Sha&eho!de&s:Focus onthe !rofita+ility and lon%*

ter health of the fir'

$!an) Focus on assessinfinancial !osition and e,

!otential fir o!!ortuniti

Cont&o!:Focus on returin,estent for ,arious as

asset efficiency'

Unde&stand) Focus onunderstandin% how su!!

analy-e the fir'

$!an) Focus on assessinfinancial !osition and e,

!otential fir o!!ortuniti

Cont&o!:Focus on returin,estent for ,arious as

asset efficiency'

Unde&stand) Focus onunderstandin% how su!!

analy-e the fir'

E.ternal /sesE.ternal /ses Internal /seInternal /ses


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Co%%on Si1 Ste* /na!"sis /**&oach

Ma-in' (ecisions

Co!!ectin' (ata

2o&%a!3ino&%a!4

Identi"in' Objectives

2.hat o

Revisin'5U*datin'

Ca!c,!atin'3/na!"6in'

1

3

45

6

2

Choosin'too!s3techni+,es


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Ste* 7: Identi"in' Objectives

What is analysis o+0eWhat $uestions do aneed to answer"

Financial

The companysreturn on equity

has dippedconsiderably over

the last period

I hadbetter

sellthatstockASAP!


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Ste* 8: Co!!ectin' and Eva!,atin' Ino&%ation3(ata

1 Fo&%a! Ino&%ation2Audited3Consolidated4 Financial stateents 2and notes4

Auditor&s re!ort

Annual Re!orts

567A

Su!!leentary schedules

Co!uteri-ed data +ases

oIn,estent fundsoArticles in !o!ular3+usiness !ressoInfo on industry nors3ratiosoInfo on !articular co!anies3industries

We+sites

1 Ino&%a! Ino&%ation


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E,aluatin% $uality of Inforation3datais a !rocess

e,aluate and ad0ust financial inforation3data colleto +etter refle. the econoic reality'

Ste* 8: Co!!ectin' and Eva!,atin' Ino&%ation3

Co!ara+ility !ro+les 8 across firs and across tie

5ana%er estiation error

6istortion !ro+les Earnin%s ana%eent

6istortion of +usiness


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Ste* 9: Choosin' too!s3techni+,es o& ana!"sis

Horizontal

TrendAnalysis

erticalStructural

Analysis"atio

Analysis

co!arison of a

co!any&s financialresults across tie'

co!arison of

financial +alances to

a +ase account fro

the sae co!any'

1 Year 9 to1 :ase*Ye

A!!roac

analysis

1 Li$uid1 Acti,i1 Le,er1 ;rofit1 5ar#e

Coon

stateents

1co!arison of

different +alances

fro the financial

stateents


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The E1a%*!e Co;s 0a!ance Sheets Yea&


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The E1a%*!e Co;s 0a!ance Sheets Yea&


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The E1a%*!e Co;s Inco%e state%ent Yea&


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The E1a%*!e Co;s Inde1ed 0a!ance Sheets


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The E1a%*!e Co;s Inde1ed 0a!ance Sheets


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The E1a%*!e Co;s Inde1ed Inco%e State%ent


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The E1a%*!e Co;s Co%%on Si6e 0a!ance Sheets


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The E1a%*!e Co;s Co%%on Si6e 0a!ance Sheets


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The E1a%*!e Co;s Co%%on Si6e Inco%e State%ent4

etaes5 5 5 :CO)SD75@?775@A:BB)&oss$&oit9AA?@A7897:98/d%: 7?99D?87D:A7E0IT8?A88887?7A:B7?IntE1*8?@7@7:A8E0T 7A7B77@77@:7E/T 7787?97:7DCash(iv@?@?@?D:?8


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CO5;ARISION ANALYSIS

Financia! $osition T&end

Intra*Industry

AnalysisTrend Analysis

Ste* 9: Choosin' too!s3techni+,es o& ana!"sis


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Int&a


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N% 8??B H0C SC@ (CC

Tn' tJi sKn 2tL n'4 D??B 7A@8 9A777

(oanh th, 2tL n'4 D@@9@ BB89@ 9B@DD

Doanh thu K.doanh a c 7988D

Tn' t&Pn' doanh th, 2>4 787@> A7?D> 9?78>

Qi nh,n '* bin 2>4 799> DA> B@8>

Qi nh,n &n' 2tL n'4 8D9 A7@?9 7@?D

n bX" tJi chnh 8BB @@8 7B

RO/ 9?> @7> AAA>ROE 9> @?B> 7D8>

E$S 2n'4 c,Zi -[ 95A @5A? 75B?

$3E 214 @7 @?B AB

$30 214 ?D 7 ?A7

Ste! =) Choosin% tools for analysis


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A!!lyin% tools3techni$ues to calculate or3and anfinancial data

Ste* D: Calculatin% and Analy-in% financial data


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(ie&ence bet.een ca!c,!ation and ana!"sis

A %ood analysis is not si!ly to co+ine infora

calculate ratios or to draw charts> /NCOLLECT

+ut to a#e the a CO5;LETE AN6 INTENTIO

!icture

Analysis is not to only to answer the $uestion WH/$$EN( +ut also WHYand (OES IT FIT THECOM$/NY;S STR/TE)Y"


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Motorola ($ mil.)

2005 2004 2003

DTT 36.843 31.323 23.155

LN H 4.696 3.132 1.273

% gDTT 18% 35% N

%g LNH 50% 146% N

No!ia ("# mil.)

2005 2004

DTT 34.191 29.371

LN H 4.639 4.326

% gDTT 16% 0.5%

%g LNH 10% 12&8%

(ie&ence bet.een ca!c,!ation and ana!"sis


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In,est or not"%i,e loan or not"what trou+le is the fir facin%"reali-e 57A">''

Ste* @: Ma-in' decisions 2answer the analysis $uestion


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/!date inforationRe,ise analysisChan%e decision if any>

Ste* A: /na!"sis U*datin' and Revision


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Business

Environment and

Strategy Analysis

IndustryAnalysis

Strategyanalysis

Estimate Cost of capital

Financial

Analysis

Profitability

analysis

Analysis of Sources and

Use of FundsRisk Analysis

Prospec

analys

Accounting

analysis

Intrinsic va

Financia! /na!"sis

F&a%e.o&-


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To*


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STE$ 7: Ind,st&";s Econo%ic Cha&acte&istics


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Ind,st&";s Econo%ic Cha&acte&istics

Can use);orter&s Fi,e ForcesEconoic Attri+utes Fraewor#

>''


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$o&te&;s Five Fo&ces

:uyer !ower * relati,e +ar%ainin% !owerLOW

Su!!lier !owerLOW

Ri,alry aon% e.istin% firs5O6ERATE

Threat of new entrantsLOW

Threat of su+stitutesLOW

!r


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Econo%ic /tt&ib,tes F&a%e.o&-

6eand

Su!!ly

5anufacturin%

5ar#etin%

In,estin% 7 Financin%


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2a!!lied to soft drin#3+e,era%e industry4

6eandRelati,ely insensiti,e to !rice

Low %rowth in /'S' +ut hi%h %rowth

elsewhere

Not cyclicalDi%her in warer weather


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2a!!lied to soft drin#3+e,era%e industry4

Su!!lyTwo !rinci!al su!!liers

Di%h +rand reco%nition

6oination of distri+ution channels

Di%h +arriers to entry


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Econo%ic /tt&ib,tes F&a%e.o&-a!!lied to soft drin#3+e,era%e industry

5anufacturin%5anufacture of concentrate3syru! not ca!ital

intensi,e

:ottlin%3distri+ution IS ca!ital intensi,e

Si!le !rocess


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Econo%ic /tt&ib,tes F&a%e.o&-a!!lied to soft drin#3+e,era%e industry

Ma&-etin':rand reco%nition( esta+lished deandad,ertisin% can stiulate

Investin'3Financin':ottlin%3distri+ution re$uire lon%*terfinancin%

;rofita+ility hi%h( %rowth slow 2in /'S'4 leadsto e.cess cash flow

Other countries %rowth re$uires financin%


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STE$ 8: Co%*an" St&ate'"

Nature of !roduct or ser,ice

niche ar#et" /ni$ue !roduct"Inte%ration within ,alue chain

eo%ra!hical di,ersification

Industry di,ersification


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STE$ 9: Financia! State%ent \,a!it"

Incoe Stateent:alance Sheet

Stateent of Cash Flows

Stateent of Shareholders& E$uity

First three re$uired ost co!anies include a


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STE$ D: $&oitabi!it" and Ris- /na!"sis

TOOQS:

Coon*si-e financial stateents

;ercenta%e chan%e stateents

Financial Stateent Ratios

;rofita+ility) E;S( ROCERis#) CR( 6e+t to E$uity


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STE$ @: Fo&ecast Financia! State%ents

Earnin%s forecasts

O!eratin% cash flow forecasts

Other #ey etrics


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STE$ A: Va!,e the Fi&%

Va!,ation based on:

6i,idends

Earnin%s

Cash flows

/!! th&ee %ethods .i!! 'ive sa%e va!,e#


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