Escolar Documentos
Profissional Documentos
Cultura Documentos
Sixth Edition
Slides by
Matthew Will
Irwin/McGraw Hill
Chapter 28
28- 2
Topics Covered
Executive Paper Corporation
Financial Ratios
The DuPont System
Financial Planning
Growth and External Financing
Irwin/McGraw Hill
28- 3
Executive Paper
Executive Paper Balance Sheet
Dec
1998
Dec
1999
diff
Assets
Current Assets
Cash & Securities
Receivables
Inventory
Total
100.0
433.1
339.9
873.0
110.0
440.0
350.0
900.0
10.0
6.9
10.1
27.0
Fixed Assets
P, P, E
accum Depr
Net Fixed Assets
929.8
396.7
533.1
100.0
450.0
550.0
-829.8
53.3
16.9
1,406.1
1,450.0
43.9
Total Assets
Irwin/McGraw Hill
28- 4
Executive Paper
Dec
1998
Dec
1999
diff
96.6
349.9
446.5
100.0
360.0
460.0
3.4
10.1
13.5
400.0
400.0
0.0
Shareholders equity
559.6
590.0
30.4
1,406.1
1,450.0
43.9
Irwin/McGraw Hill
28- 5
Executive Paper
1998
1999
1110
1231
598
708
14.16
14.16
42.25
50
Irwin/McGraw Hill
28- 6
Executive Paper
Executive Paper Income Statement (1999)
Revenues
Costs
Depreciation
EBIT
Interest
Tax
Net income
Dividend
Retained earnings
Earnings per share, dollars
Dividend per share, dollars
Irwin/McGraw Hill
$ millions
2,200.00
1,980.00
53.30
166.70
40.00
50.70
76.00
45.60
30.40
5.37
3.22
28- 7
Executive Paper
Executive Paper Sources and Uses of Funds (1999)
Sources:
Net Income
Depreciation
Operating cash flow
Borrowing
Stock issues
Total sources
Uses:
Increase in net working capital
Investment
Dividends
Total uses
Irwin/McGraw Hill
$ millions
76.00
53.30
129.30
129.30
13.50
70.20
45.60
129.30
28- 8
Leverage Ratios
long term debt
Long term debt ratio =
long term debt + equity
Irwin/McGraw Hill
28- 9
Leverage Ratios
total liabilities
Total debt ratio =
total assets
EBIT
=
interest payments
EBIT + depreciation
Cash cover age ratio =
interest payments
Irwin/McGraw Hill
28- 10
Liquidity Ratios
Net working capital
Net working capital
=
to total assets ratio
Total assets
current assets
Current ratio =
current liabilities
Irwin/McGraw Hill
28- 11
Liquidity Ratios
cash + marketable securities + receivables
Quick ratio =
current liabilities
Interval measure =
Irwin/McGraw Hill
28- 12
Efficiency Ratios
Sales
Asset turnover ratio =
Average total assets
sales
NWCturnover =
average net working capital
Irwin/McGraw Hill
28- 13
Efficiency Ratios
cost of goods sold
Inventory turnover ratio =
average inventory
average inventory
Days' sales in inventory =
cost of goods sold / 365
Irwin/McGraw Hill
average receivables
average daily sales
28- 14
Profitability Ratios
Net profit margin =
EBIT - tax
sales
EBIT - tax
Return on assets =
average total assets
Irwin/McGraw Hill
28- 15
Profitability Ratios
dividends
Payout ratio =
earnings
earnings - dividends
Plowback ratio =
earnings
= 1 - payout ratio
earnings - dividends
Growth in equity from plowback =
earnings
Irwin/McGraw Hill
28- 16
P0
Di v 1
1
Forecasted PE ratio =
=
x
aveEPS1
EPS1
r - g
Irwin/McGraw Hill
28- 17
Div 1
=
r - g
stock price
Market to book ratio =
book value per share
Irwin/McGraw Hill
28- 18
Irwin/McGraw Hill
28- 19
Irwin/McGraw Hill
28- 20
asset
turnover
Irwin/McGraw Hill
profit
margin
28- 21
ROE =
Irwin/McGraw Hill
28- 22
ROE =
assets
sales
EBIT - taxes EBIT - taxes - interest
x
x
x
equity assets
sales
EBIT - taxes
leverage asset
ratio turnover
Irwin/McGraw Hill
profit
margin
debt
burden