Bài giảng Financial Management - Chapter 6 –Support: Financial Statement Analysis

Chapter 6 –SupportFinancial Statement AnalysisRemember?Common-size AnalysisAn analysis of percentage financial statements where all balance sheet items are divided by total assets and all income statement items are divided by net sales or revenues.and Remember? Index AnalysesAn analysis of percentage financial statements where all balance sheet or income statement figures for a base year equal 100.0 (percent) and subsequent financial statement items are expressed as percentages of their values in the base year.Use Excel to Conduct a Common-Size AnalysisFirst, go to and type in ‘GOOG’ in the ‘Get Quotes’ box to find a company like Google.Source: Reproduced with permission of Yahoo! Inc. ® 2008 by Yahoo! Inc. YAHOO! and YAHOO! logo are trademarks of Yahoo! Inc.Use Excel to Conduct a Common-Size AnalysisNext, click the ‘Get Quotes’ box to access the Google data.Notice on the left side all of the data that Yahoo! Provides for users.Source: Reproduced with permission of Yahoo! Inc. ® 2008 by Yahoo! Inc. YAHOO! and YAHOO! logo are trademarks of Yahoo! Inc.Use Excel to Conduct a Common-Size AnalysisNotice the important financial data?We will click on the ‘Income Statement’ and then the ‘Balance Sheet’ links to copy and paste the data into Excel.Source: Reproduced with permission of Yahoo! Inc. ® 2008 by Yahoo! Inc. YAHOO! and YAHOO! logo are trademarks of Yahoo! Inc.Snapshot of Google Balance Sheet from Yahoo! FinanceHere is the balance sheet data.Highlight and copy into an open worksheet in ExcelSource: Reproduced with permission of Yahoo! Inc. ® 2008 by Yahoo! Inc. YAHOO! and YAHOO! logo are trademarks of Yahoo! Inc.Snapshot of Google Income Statement from Yahoo! FinanceHere is the income statement data.Highlight and copy into an open worksheet in ExcelSource: Reproduced with permission of Yahoo! Inc. ® 2008 by Yahoo! Inc. YAHOO! and YAHOO! logo are trademarks of Yahoo! Inc.Now create the Common-size analysisWe have tweaked some of the data cells pasted as they are not copied as ‘numbers’, but ‘text’ formatting. The result is the ability to analyze quickly and easily.Now create the Common-size analysisNotice we see R&D and SGA increasing faster than revenue, but it has been offset by lower cost of revenue and taxes.Now create the Index analysisAgain, we can see that R&D and SGA are rising faster than revenue, but we also see that other income is growing fast resulting in net income available to common shareholders growing slightly faster than revenue.We can do the same on the Balance Sheet!Again, we analyze similarly and can see that some longer-lived assets are seeing huge increases (goodwill and PP&E) which is being financed by internally generated funds shown via RE.Ratio AnalysisWe can, of course, now utilize the data you have in Excel to conduct ratio analysis. You would likely want to also collect industry relevant data.The result would allow you to do the type of analysis discussed in the text.