财务报表分析与运用杰拉尔德课后答案英文版第三章

3-PAGE\*ARABIC23Chapter3-SolutionsOverview:ProblemLengthProblem#’s{S}1,3{M}2,7,8,12,13{L}4-6,9-11,14,151.{S}a.PalombaPizzaStoresStatementofCashFlowsYearEndedDecember31,2000PRIVATECashFlowsfromOperatingActivities:CashCollectionsfromCustomersCashPaymentstoSuppliersCashPaymentsforSalariesCashPaymentsforInterestNetCashfromOperatingActivitiesCashFlowsfromInvestingActivities:SalesofEquipmentPurchaseofEquipmentPurchaseofLandNetCashforInvestingActivitiesCashFlowsfromFinancingActivities:RetirementofCommonStockPaymentofDividendsNetCashforFinancingActivitiesNetIncreaseinCashCashatBeginningofYearCashatEndofYear$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.CashFlowfromOperations(CFO)measuresthecashgeneratingabilityofoperations,inadditiontoprofitability.Ifusedasameasureofperformance,CFOislesssubjecttodistortionthannetincome.AnalystsusetheCFOasacheckonthequalityofreportedearnings,althoughitisnotasubstitutefornetincome.CompanieswithhighnetincomeandlowCFOmaybeusingoverlyaggressiveincomerecognitiontechniques.Theabilityofafirmtogeneratecashfromoperationsonaconsistentbasisisoneindicationofthefinancialhealthofthefirm.AnalystssearchfortrendsinCFOtoindicatefuturecashconditionsandpotentialliquidityorsolvencyproblems.CashFlowfromInvestingActivities(CFI)reportshowthefirmisinvestingitsexcesscash.TheanalystmustconsidertheabilityofthefirmtocontinuetogrowandCFIisagoodindicationoftheattitudeofmanagementinthisarea.Thiscomponentoftotalcashflowincludesthecapitalexpendituresmadebymanagementtomaintainandexpandproductivecapacity.DecreasingCFImaybeaforecastofslowerfuturegrowth.CashFlowfromFinancing(CFF)indicatesthesourcesoffinancingforthefirm.Forfirmsthatrequireexternalsourcesoffinancing(eitherborrowingorequityfinancing)itcommunicatesmanagement'spreferencesregardingfinancialleverage.Debtfinancingindicatesfuturecashrequirementsforprincipalandinterestpayments.Equityfinancingwillcausefutureearningspersharedilution.Forfirmswhoseoperatingcashflowexceedsinvestmentneeds,CFFindicateswhetherthatexcessisusedtorepaydebt,pay(orincrease)cashdividends,orrepurchaseoutstandingshares.c.CashpaymentsforinterestshouldbeclassifiedasCFFforpurposesofanalysis.Thisclassificationseparatestheeffectoffinancialleveragedecisionsfromoperatingresults.ItalsofacilitatesthecomparisonofPalombawithotherfirmswhosefinancialleveragediffers.d.Thechangeincashhasnoanalyticsignificance.Thechangeincash(andhence,thecashbalanceattheendoftheyear)isaproductofmanagementdecisionsregardingfinancing.Forexample,thefirmcanshowalargecashbalancebydrawingonbanklinesjustpriortoyearend.e.andf.Thereareanumberofdefinitionsoffreecashflows.Inthetext,freecashflowisdefinedascashfromoperationslesstheamountofcapitalexpendituresrequiredtomaintainthefirm’scurrentproductivecapacity.Thisdefinitionrequirestheexclusionofcostsofgrowthandacquisitions.However,fewfirmsprovideseparatedisclosuresofexpendituresincurredtomaintainproductivecapacity.Capitalcostsofacquisitionsmaybeobtainedfromproxystatementsandotherdisclosuresofacquisitions(SeeChapter14).Inthefinanceliterature,freecashflowsavailabletoequityholdersareoftenmeasuredascashfromoperationslesscapitalexpenditures.Interestpaidisadeductionwhencomputingcashfromoperationsasitispaidtocreditors.Palomba’sfreecashflowavailabletoequityholdersiscalculatedasfollows:Netcashflowfromoperatingactivitieslessnetcashforinvestingactivities:$110,000-$6,000=$104,000Theinvestmentactivitiesdisclosedintheproblemdonotindicateanyacquisitions.Anotherdefinitionoffreecashflows,whichfocusesonfreecashflowavailabletoallprovidersofcapital,wouldexcludepaymentsforinterest($10,000inthiscase)anddebt.Thus,Palomba’sfreecashflowavailabletoallprovidersofcapitalwouldbe$114,000.2.{M}a.PRIVATE199619971998199920002001SalesBaddebtexpenseNetreceivablesCashcollections1$------30$---$140740$123$150750$133$165860$147$1751075$150$1951095$1651Sales-baddebtexpense-increaseinnetreceivablesb.19971998199920002001Baddebtexpense/sales5.0%4.7%4.9%5.7%5.1%Netreceivables/sales28.633.336.442.848.7Cashcollections/sales87.988.789.185.784.6c.Thebaddebtprovisiondoesnotseemtobeadequate.From1997-2001salesincreasedbyapproximately40%,whilenetreceivablesmorethandoubled,indicatingthatcollectionshavebeenlagging.Theratioscalculatedinpartbalsoindicatetheproblem.Whilebaddebtexpensehasremainedfairlyconstantat5%ofsalesoverthe5yearperiod,netreceivablesasapercentageofsaleshaveincreasedfrom29%to49%;cashcollectionsrelativetosaleshavedeclined.OtherpossibleexplanationsforthesedataarethatstatedpaymenttermshavelengthenedorthatStengelhasallowedcustomerstodelaypaymentforcompetitivereasons.3.{S}NiagaraCompanyStatementofCashFlows2001PRIVATECashcollectionsCashinputsCashexpensesCashinterestpaidIncometaxespaidCashfromOperationsPurchaseoffixedassetsCashUsedforInvestingIncreaseinLTdebtDecreaseinnotespayableDividendspaidCashUsedforFinancingNetChangeinCashCashBalance12/31/00CashBalance12/31/01$980(670)(75)(40)(30)$165(150)(150)50(25)(30)(5)$1050$60[Sales-AccountsReceivable][COGS+Inventory[Selling&GeneralExpense-AccountsPayable1][InterestExpense-InterestPayable][IncomeTaxExpense-DeferredTax][DepreciationExpense+FixedAssets(net)][NetIncome-Retainedearnings]1Canalsobeusedtocalculatecashinputs,decreasingthatoutflowto$645whileincreasingcashexpensesto$100.4.{L}a.GCompanyIncomeStatement,2000($thousands)PRIVATESalesCOGS+operatingexpenses1DepreciationInterestTaxesNetincome$3,8413,651154142$92[receiptsfromcustomers+increaseinaccountsreceivable][payments-increaseininventory+increaseinaccountspayable][increaseinaccumulateddepreciation][payments][payment+increaseintaxpayable][check=changeinretainedearningsastherearenodividends]1Notethatthesetwoitemscannotbecalculatedseparatelyfromtheinformationavailable.b.MCompanyCashReceiptsandDisbursements,2000($thousands)PRIVATECashreceiptsfrom:CustomersIssueofstockShort-termdebtLong-termdebtTotalCashdisbursements:COGSandoperatingexpensesTaxesInterestDividendsPP&EpurchaseTotalChangeincash$1,80736296$1,968$1,8433512233$1,952$16[Sales-increaseinreceivables][Increaseinaccount][Increaseinliability][Increaseinliability][COGS+operatingexpense+increaseininventory+decreaseinaccountspayable][Expense-increaseintaxpayable][Expense][Income+increaseinretainedearnings][ChangeinPP&E]Note:Thisisnotatruereceiptsanddisbursementsscheduleasitshowscertainamounts(e.g.,debt)onanetbasisratherthangross.Suchschedules(andcashflowstatements)preparedfrompublisheddatacanonlyshowsomeamountsnet,unlesssupplementarydataareavailable.c.ThecashflowstatementsarepresentedwiththeincomestatementforcomparisonpurposesinansweringPartd.MCompany:StatementofCashFlows($thousands)PRIVATE19961997199819992000CFO:FromcustomersLessoutlaysfor:COGS/oper.exp.InterestTaxesCFI:PP&EpurchaseCFF:IssueofstockShort-termdebtLong-termdebtDividendsStockrepurchaseLTdebtrepaidSTdebtrepaidChangeincash$1,1651,1301523$(3)(14)564--(20)(22)(2)--$258$1,2101,1871919$(15)(17)565--(21)(14)(2)--$331$1,3271,326169$(24)(37)8--100(21)--(3)(8)$7615$1,5871,672219$(115)(30)3153--(21)(10)----$125(20)$1,8071,843513$(90)(33)36296(22)------$13916MCompany:IncomeStatement($thousands)PRIVATE19961997199819992000SalesCOGSOperatingexpenseDepreciationInterestTaxesTotalNetIncome$1,22081829891538$1,17842$1,265843320101933$1,22540$1,384931363111627$1,34836$1,6551,125434122126$1,85237$1,8611,27750414516$1,8529GCompany:StatementofCashFlows($thousands)PRIVATE19961997199819992000CFO:FromcustomersDisbursements:COGS/Oper.exp.InterestTaxesCFI:PP&EpurchaseCFF:IssueofstockShort-termdebtLong-termdebtChangeincash$1,1101,2141113$(128)---108040$130$2$1,6591,7021315$(71)------5223$75$4$2,1631,7022316$(93)(20)59120$116$3$2,8092,8952929$(144)(10)453125$173$19$3,6793,7784135$(175)---306050$140$35GCompany--IncomeStatement($thousands)PRIVATE19961997199819992000SalesCOGSOperatingexpenseDepreciationInterestTaxesTotalNetincome$1,3391,039243101113$1,316$23$1,7311,334312101320$1,689$42$2,2611,743398122327$2,203$58$2,9392,267524142931$2,865$74$3,841}---}3,651154142$3,749$92Note:2000COGSandoperatingexpensearecombinedasthereisinsufficientinformationtoseparatethem.d.Bothcompaniesarecreditrisks.Althoughbothareprofitable,theirCFOisincreasinglynegative.Ifcurrenttrendscontinuetheyfacepossibleinsolvency.However,beforerejectingbothloansoutright,itisimportanttoknowwhetherCFOandincomedifferbecausethecompaniesaredoingpoorlyorbecausetheyaregrowingtoofast.Bothcompaniesincreasedsalesoverthe5yearperiod;CompanyMby50%,CompanyGbymorethan300%.Arethesesalesreal(willcashcollectionsmaterialize)?Iftheyare"growingtoofast,"itmaybeadvisabletomaketheloanbutalsotoforcethecompanytocurtailitsgrowthuntilCFOcatchesup.Onewaytoverifywhetherthegapistheresultofsalestopoorcreditrisksistocheckifthegrowthinreceivablesis"proportional"tothesalesgrowth.Similarcheckscanbemadeforthegrowthininventoriesandpayables.Inthiscase,theinventoryofMcompanyhasdoubledfrom1996to2000whileCOGSincreasedbyonly56%.Theinventoryincreasewouldbeoneareatoinvestigatefurther.Thereisasignificantdifferenceintheinvestmentpatternofthetwocompanies.CompanyMhasmadepurchasesofPPEeachyear,whileCompanyGhasmadelittlenetinvestmentinPPEovertheperiod.YetCompanyGhasgrownmuchfaster.Doesthisreflectthenatureofthebusiness(CompanyGismuchlesscapitalintensive)orhasCompanyGusedoffbalancesheetfinancingtechniques?Thecashfromfinancingpatternsofthetwocompaniesalsodiffer.Bothtripledtheirtotaldebtovertheperiodandincreasedtheratiooftotaldebttoequity.GivenCompanyM'sslowergrowth(insalesandequity),itsdebtburdenhasgrownmuchmorerapidly.Despitethis,CompanyMhascontinuedtopaydividendsandrepurchasestock.CompanyGhasnotpaiddividendsandhasissuednewequity.Thesetwofactorsaccountforitslargerincreaseinequityfrom1996to2000.Basedonlyonthefinancialdataprovided,Glookslikethebettercreditrisk.Itssalesandincomearegrowingrapidly,whileM'sincomeisstabletodecliningonmodestlygrowingsales.Unlessfurtherinvestigationchangestheinsightsdiscussedhere,youshouldprefertolendtoCompanyG.5.{L}a.(i)StatementofCashFlows-IndirectMethodCashfromoperations:Netincome$1,080Addnoncashexpense:depreciation600Add/Subtractchangesinworkingcapital:Accountsreceivable(150)Inventory(200)Accruals80Accountspayable120(150)$1,530Cashfrominvesting:Capitalexpenditures1,150Cashfromfinancing:Shorttermborrowing550Long-termrepayment(398)Dividends(432)$(280)Netchangeincash$100Worksheetfor(IndirectMethod)CashFlowStatementIncomeBalanceSheetCashStatement12/31/0012/31/01ChangeEffectNetincome$1,080$1,080Depreciation600600Accountsreceivable$1,500$1,650$150(150)Inventory2,0002,200200(200)Accruals8008808080Accountspayable1,2001,320120120Depreciation(600)(600)Netfixedassets6,5007,050550(550)Capitalexpenditures$(1,150)Notepayable5,5006,050550550Short-termborrowing$550Long-termdebt2,0001,602(398)(398)Long-termdebtrepayment$(398)Netincome(1,080)(1,080)Retainedearnings5001,148648648Dividendspaid$(432)_______________0$100Theworksheettocreatethecashflowstatementispresentedabove.Eachbalancesheetchange(otherthancash)isaccountedforandmatchedwithitscorrespondingactivity.Asalastcheck,thenetincomeandtheadd-backsofnon-cashitemsarebalancedand“closed”totheirrespectiveaccounts(PP&Eandretainedearnings)providingtheamountsofcapitalexpendituresanddividends.a.(ii)StatementofCashFlows-DirectMethodCashfromOperations:Cashcollections$9,850Cashpaymentsformerchandise(6,080)CashpaidforSG&A(920)Cashpaidforinterest(600)Cashpaidfortaxes(720)$1,530CashforInvestingActivities:Capitalexpenditures(1,150)CashforFinancingActivities:Short-termborrowing550Long-termdebtrepayment(398)Dividends(432)$(280)NetChangeinCash$100Theworksheettocreatethecashflowstatementispresentedbelow.Eachbalancesheetchange(otherthancash)isaccountedforandmatchedwithitscorrespondingactivity.Furthermoretheoperatingaccountchangesarematchedtotheircorrespondingincomestatementitem.Asalastcheck,thenetincomeisbalancedand“closed”toretainedearningsprovidingtheamountofdividends.Notethatthereisnodifferencebetweentheindirectanddirectmethodsinthecashflowstatementandintheworksheetforcashforinvestingandfinancingactivities,Worksheetfor(DirectMethod)CashFlowStatementIncomeBalanceSheetCashStatement12/31/0012/31/01ChangeEffectSales$10,000$10,000Accountsreceivable$1,500$1,650$150(150)CashCollections$9,850COGS(6,000)(6,000)Inventory2,0002,200200(200)Accountspayable1,2001,320120120CashPaidforMerchandise$(6,080)SG&Aexpense(1,000)(1,000)Accruals8008808080CashPaidforSG&A$(920)Interestexpense(600)(600)CashPaidforInterest$(600)Taxes(720)(720)CashPaidforTaxes$(720)Depreciation(600)(600)Netfixedassets6,5007,050550(550)CapitalExpenditures$(1,150)Notepayable5,5006,050550550Short-termBorrowing$550Long-termdebt2,0001,602(398)(398)Long-termDebtRepaid$(398)Netincome(1,080)(1,080)Retainedearnings5001,148648648Dividends$(432)_____________$0$1006.{L}a.Exhibit3P-3doesnotprovidethe(changesinthe)individualcomponentsthatmakeupthechangesinworkingcapital.Assuch,tocreatethedirectmethodcashflowstatement,wemustobtaintheinformationdirectlyfromthebalancesheet.Thisproceduredoesnotnecessarilyyieldthesamecashflowcomponentsusingthedirectmethodasthoseprovidedbythecompanyinitsindirectmethodcalculations.Differencesmayarisewhenthereareacquisitions/divestmentsthereareforeignexchangeadjustmentsthefirmaggregatesorclassifiesinvestingaccrualstogetherwithoperatingones.Inthiscase,thedifferencesareminimalasindicatedbelow.(ThecalculationsrequiredforthedirectmethodcashflowstatementarepresentedinExhibit3S-1alongwiththeassumptionsusedtogeneratethestatement)DirectMethodCashFlowStatement(Exhibit3S-1)IndirectMethod(Exhibit3P-3)DifferenceCashcollections$348,627Cashforsuppliers(246,100)Cashexpenses(94,791)Interestpaid(5,303)Taxpaid(2,127)CashFromOperations$4,560$4,398$162CashFrominvestments(4,251)(4,089)(162)CashFromFinancing215215---Changeincash$524$524---Exhibit3S-1:DirectMethodStatementofCashFlowsIncomeBalanceBalanceStatementSheetSheet200112/31/006/30/2001ChangeCashEffectSales$342,215$342,215Accountsreceivable91,63685,224(6,412)6,412Cashcollections$348,627Costofgoodssold(238,799)(238,799)Inventories163,206158,451(4,755)4,755Accountspayable84,73472,678(12,056)(12,056)Cashinputs$(246,100)Operatingexpenses(91,795)(91,795)Othercurrentassets1,4261,843417(417)Prepaidexpenses&otherassets55,56656,6301,064(1,064)Accruedexpenses*17,67916,299(1,380)(1,380)Postretirementbenefitobligation2,2652,130(135)(135)Cashexpenses$(94,791)Interestexpense(5,128)(5,128)Interestpayable*1750(175)(175)Interestpaid$(5,303)Taxexpense(831)(831)Incometaxreceivable4,1162,889(1,227)1,227Incometaxpayable1,1302,3831,2531,253Deferredincometaxes18,09618,574478478Taxpaid$2,127Cashflowfromoperations4,560Depreciationexpense(4,732)(4,732)Fixedassets91,10890,966(142)142Investmentsinjointventures9,7149,591(123)123Minorityinterest9711,187216216Cashflowfrominvestments$(4,251)Currentportionoflong-termdebt3,4253,425-0Long-termdebt161,135165,7994,6644,664Dividendspaid**(4,461)Other-changeinstockholders'equity12Cashflowfromfinancing$215NetIncome(check)930Netchangeincash$524*Assumedchangeininterestpayabletoconformtointerestpaid.**Fromtheindirectmethodb.1st6Months199619971998199920002001TotalsCFO$34,915$5,165$(23,528)$73,597$(18,606)$4,560$76,103CFI(38,007)(42,977)(46,767)(13,500)(9,017)(4,251)(154,519)$(3,092)$(37,812)$(70,295)$60,097$(27,623)$309$(78,416)CFF4,23038,78270,474(60,473)27,12421580,352AsnotedinBox3-2,from1996to2000,thecompanygeneratedfreecashflow(CFOlessnetcapitalexpenditures)of$1.5million,duringthefirstsixmonthstheA.M.Castleaddedanother$309thousand.However,Box3-2alsoshowedthatoverthefive-yearperiod,Castlepaidnearly$50millionindividendsandborrowednearly$130milliontofinanceitsinvestmentsandacquisitions.Thistrendcontinuedinthefirstsixmonthsof2001duringwhichthefirmborrowedanadditional$4.664milliontohelppayitsdividendsandmeetcapitalexpenditureneeds.Cashgeneratedfromoperationsfrom1996throughtheendofthefirst6monthsof2001was$76millionbutthecompanyspent$154milliontoreplaceproductivecapacityandforinvestmentsandacquisitions.Whenfreecashflowsiscalculatedonthisbasis(i.e.CFO–CFI)thereisashortfallof$78million.Thisshortfallaswellasdividendpaymentswerefinancedbyborrowingoverthesameperiod.Theinabilitytomeetitscapitalanddividendneedsfromoperationsclearlyindicatedthateitherthedividendwouldhavetobereducedorthecompanywouldnotbeabletoremaincompetitiveand/orgrowasneeded.7.{M}a.TheSwedishGAAPcashflowstatements(CFS)beginwithpretaxandpre-financialitemswhereastheU.S.GAAPCFSshowadjustmentstonetincome.Thenetfinancialitemsaggregateinterestcostsandinterestincomefromvarioussources(includingdividendsandinterestfromassociatedcompaniesandotherinterestincome).SwedishGAAPCFSaggregateallchangesinworkingcapital;U.S.GAAPCFSprovidedetaileddisclosureoftheoperatingchangesincomponentsofworkingcapital;non-operatingchangesarereportedascomponentsofinvestingactivities.SwedishGAAPcombinescashandcashequivalents,financialreceivables(primarilyreceivablesfromassociatedcompanies)andfinancialliabilities(currentandlong-termdebt)inameasurecallednetfinancialassetsorliabilities.SFAS95showsthechangeincashandcashequivalentswithchangesinfinancialreceivablesreportedascomponentsofCFOandCFI.Changesincurrentandlong-termdebtarereportedincashfromfinancingactivities.Thecashflowstatementisshownonpage16.c.Disadvantages:Aggregationofallchangesinoperatingorworkingcapitalaccountscombinescashconsequencesofoperatingandinvestingactivities.Asnotedinthechapter,investingactivitiestendtodistortcashflowfromoperations.Theuseofnetfinancialitemstendstoobscuresoperating,investing,andfinancingactivities.Althoughdisclosureisavailabletofacilitateitscalculation,noseparatedisclosureofactualcashoutflowforinterest(financing)costsisprovided.Theinclusionoffinancialliabilities(borrowingandrepayment)andfinancialreceivablesinliquidfundsdistortscashflowsfrombothinvestingandfinancingactivities.Thisapproachalsohamperstheanalysisoffreecashflowsdiscussedinthechapter.Itisalsounclearwhatbasiswasusedbythecompanytoallocateaportionofthefinancialreceivablestooperatingactivitiesandtheremaindertothenetfinancialpositioncategory.[Partciscontinuedonpage17]b.AmountsinmillionsofSwedishKronorSwedishGAAPU.S.GAAPYearsEndingDecember3119991998 19991998Operatingprofit2,6152,475Netincome2,2872,591Noncashitems1,5511,3881,5511,388Changeinworkingcapital (3)169(3)169Netfinancialitems(206)(137)(137)Paidtax(122)2530253Cashflowbeforecapitalexpenditure3,8354,148Operatingactivities3,8354,148Capitalexpenditure(1,988)(2,557)(1,988)(2,557)Changeinfinancialreceivables(3,395)Effectsfromdivestedactivities3,2580 3,2580Cashflowbeforedividend5,1051,591Investingactivities(2,125)(2,557)Issueofwarrantsandconvertibleloan046 046Dividendpaid:Ordinary(889)(800)(889)(800)    Extra(3,110)0(3,110)0Changeinfinancialliabilities2,5210Financingactivities(1,478)(754)Currencyeffects(17)(111)Exchangerateeffects(17)(111)Changeinnetfinancialliability1,089726Changeincashandmarketablesecurities215726Closingliquidfunds1,4561,241Financialreceivables3,3950Financialliabilities(6,905)(4,384)Cashandmarketablesecur