phân tích tài chính doanh nghiệp prospective analysis

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Financial
Statement
Analysis
K R Subramanyam
John J Wild
9-2
9
CHAPTER
Prospective Analysis
9-3
Prospective Analysis
Security Valuation - free cash flow and residual
income models require estimates of future financial
statements.
Management Assessment - forecasts of financial
performance examine the viability of companies’
strategic plans.
Assessment of Solvency - useful to creditors to
assess a company’s ability to meet debt service
requirements, both short-term and long-term.
Security Valuation - free cash flow and residual
income models require estimates of future financial
statements.
Management Assessment - forecasts of financial
performance examine the viability of companies’
strategic plans.
Assessment of Solvency - useful to creditors to
assess a company’s ability to meet debt service
requirements, both short-term and long-term.

Importance
9-4
The Projection Process
Projected Income Statement
Sales forecasts are a function of:
1) Historical trends
2) Expected level of macroeconomic activity
3) The competitive landscape
4) New versus old store mix (strategic
initiatives)
Sales forecasts are a function of:
1) Historical trends
2) Expected level of macroeconomic activity
3) The competitive landscape
4) New versus old store mix (strategic
initiatives)
9-5
The Projection Process
Target Corporation Income Statements
9-6
The Projection Process
Steps:
1. Project sales
2. Project cost of goods sold and gross profit margins using
historical averages as a percent of sales
3. Project SG&A expenses using historical averages as a
percent of sales
4. Project depreciation expense as an historical average
percentage of beginning-of-year depreciable assets
5. Project interest expense as a percent of beginning-of-

year interest-bearing debt using existing rates if fixed
and projected rates if variable
6. Project tax expense as an average of historical tax
expense to pre-tax income
Projected Income Statement
9-7
The Projection Process
Target Corporation Projected Income Statement
9-8
The Projection Process
Target Corporation Projected Income Statement
9-9
The Projection Process
Steps:
1. Project current assets other than cash, using projected sales
or cost of goods sold and appropriate turnover ratios as
described below.
2. Project PP&E increases with capital expenditures estimate
derived from historical trends or information obtained in the
MD&A section of the annual report.
3. Project current liabilities other than debt, using projected sales
or cost of goods sold and appropriate turnover ratios as
described below
4. Obtain current maturities of long-term debt from the long-term
debt footnote.
5. Assume other short-term indebtedness is unchanged from
prior year balance unless they have exhibited noticeable
trends.
(continued)
Projected Balance Sheet

9-10
The Projection Process
Steps:
6. Assume initial long-term debt balance is equal to the prior
period long-term debt less current maturities from Step 4.
7. Assume other long-term obligations are equal to the prior
year’s balance unless they have exhibited noticeable trends.
8. Assume initial estimate of common stock is equal to the prior
year’s balance
9. Assume retained earnings are equal to the prior year’s
balance plus (minus) net profit (loss) and less expected
dividends.
10. Assume other equity accounts are equal to the prior year’s
balance unless they have exhibited noticeable trends.
Projected Balance Sheet
9-11
The Projection Process
Target Corporation Balance Sheet
9-12
The Projection Process
Steps in Projection (Target)
9-13
The Projection Process
Target Corporation Balance Sheet
9-14
The Projection Process
•
If the estimated cash balance is much
higher or lower, further adjustments can be
made to:

1. invest excess cash in marketable securities
2. reduce long-term debt and/or equity
proportionately so as to keep the degree of
financial leverage consistent with prior years.
Projected Balance Sheet
9-15
The Projection Process
Target Corporation Projected Statement of Cash Flows
9-16
The Projection Process
Sensitivity Analysis
•
Vary projection assumptions to find those with
the greatest effect on projected profits and
cash flows
•
Examine the influential variables closely
•
Prepare expected, optimistic, and pessimistic
scenarios to develop a range of possible
outcomes
•
Vary projection assumptions to find those with
the greatest effect on projected profits and
cash flows
•
Examine the influential variables closely
•
Prepare expected, optimistic, and pessimistic
scenarios to develop a range of possible

outcomes
9-17
Application of Prospective Analysis in the
Residual Income Valuation Model
The residual income valuation model defines equity value
at time t as the sum of current book value and the present
value of all future expected residual income:
where BV
t
is book value at the end of period t, RI
t + n
is residual income in
period t + n, and k is cost of capital (see Chapter 1). Residual income at
time t is defined as comprehensive net income minus a charge on
beginning book value, that is, RI
t
= NI
t
- (k x BV
t - 1
).
The residual income valuation model defines equity value
at time t as the sum of current book value and the present
value of all future expected residual income:
where BV
t
is book value at the end of period t, RI
t + n
is residual income in
period t + n, and k is cost of capital (see Chapter 1). Residual income at

time t is defined as comprehensive net income minus a charge on
beginning book value, that is, RI
t
= NI
t
- (k x BV
t - 1
).
9-18
Application of Prospective Analysis in
the Residual Income Valuation Model
In its simplest form, we can perform a
valuation by projecting the following
parameters:
-Sales growth.
-Net profit margin (Net income/Sales).
-Net working capital turnover (Sales/Net WC).
-Fixed-asset turnover (Sales/Fixed assets).
-Financial leverage (Operating assets/Equity).
-Cost of equity capital
In its simplest form, we can perform a
valuation by projecting the following
parameters:
-Sales growth.
-Net profit margin (Net income/Sales).
-Net working capital turnover (Sales/Net WC).
-Fixed-asset turnover (Sales/Fixed assets).
-Financial leverage (Operating assets/Equity).
-Cost of equity capital
9-199-19

9-20
Trends in Value Drivers
The Residual Income valuation model defines residual income as:
RI
t

= NI
t
– (k X BV
t-1
)
= (ROE
t
– k) X BV
t-1
Where ROE = NI/BV
t-1
- Stock price is only impacted so long as ROE ≠ k
- Shareholder value is created so long as ROE > k
- ROE is a value driver as are its components
- Net Profit Margin
- Asset Turnover
- Financial leverage
Two relevant observations:
- ROEs tend to revert to a long-run equilibrium.
- The reversion is incomplete.
The Residual Income valuation model defines residual income as:
RI
t

= NI
t
– (k X BV
t-1
)
= (ROE
t
– k) X BV
t-1
Where ROE = NI/BV
t-1
- Stock price is only impacted so long as ROE ≠ k
- Shareholder value is created so long as ROE > k
- ROE is a value driver as are its components
- Net Profit Margin
- Asset Turnover
- Financial leverage
Two relevant observations:
- ROEs tend to revert to a long-run equilibrium.
- The reversion is incomplete.
9-21
Trends in Value Drivers
Reversion of ROE
9-22
Trends in Value Drivers
Reversion of Net Profit Margin
9-23
Trends in Value Drivers
Reversion of Total Asset Turnover