6thCh4P_1 - CHAPTER4 RatioAnalysis DuPontSystem...

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CHAPTER 4 Analysis of Financial Statements Ratio Analysis DuPont System Effects of Improving Ratios Limitations of Ratio Analysis Qualitative Factors Economic Value Added
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4-2 Analysis of Financial Statements weaknesses of company of CF future plans. Financial statement analysis - study relationship between  how change over time (trend analysis)   ratio analysis)
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Ratios to know from chapter 4 Current Ratio Inventory Turnover ratio DSO = Days Sales Outstanding  Total Asset turnover ratio Debt ratio Times-interest-earned ratio Profit margin on sales Return on Assets Return on Equity BEP (Basic Earning Power) (need for capital structure chapter) Price/Earnings ratio du Pont equation for ROE and for ROA Equity multiplier Earnings per share Dividends per share 4-3
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      2008 7,282   632,160 1,287,360 1,926,802 1,202,950     263,160     939,790 2,866,592       2009E 85,632  878,000 1,716,480 2,680,112 1,197,160     380,120     817,040 3,497,152 Balance Sheet: Assets Cash A/R Inventories Total CA Gross FA Less: Deprec. Net FA Total Assets 4-4
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Balance Sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity 4-5       2008 524,160   636,808     489,600 1,650,568 723,432 460,000      32,592     492,592 2,866,592       2009E 436,800   300,000     408,000 1,144,800 400,000 1,721,176     231,176 1,952,352 3,497,152
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Income Statement Sales COGS Other expenses EBITDA EBIT Interest exp. EBT Taxes Net income 4-6       2008 6,034,000 5,528,000 519,988     (13,988)      116,960   (130,948)      136,012   (266,960)   (106,784)   (160,176)     2009E 7,035,600   5,875,992     550,000 609,608     116,960 492,648       70,008 422,640     169,056    253,584
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Other Data No. of shares EPS DPS Stock price Lease pmts 4-7       2009E 250,000 $1.014 $0.220 $12.17 $40,000      2008 100,000 -$1.602 $0.110 $2.25 $40,000
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Ratios standardize numbers and  facilitate comparisons. Ratios are used to highlight  weaknesses and strengths. Ratio comparisons should be made 
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This note was uploaded on 03/02/2011 for the course BMGT 340 taught by Professor White during the Spring '08 term at Maryland.

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6thCh4P_1 - CHAPTER4 RatioAnalysis DuPontSystem...

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