财务报表分析研究外文翻译.doc

1、 本科毕业设计（论文）外文翻译 题 目 双汇企业财务报表分析研究 姓 名 宋孟姣 专 业 2010级财务管理本科1班 学 号 201040016 指导教师 董玥玥 郑州科技学院工商管理学院二一四年三月 FINANCIAL STATEMENT ANALYSIS OF EVERAGE AND HOW IT INFORMS ABOUT PORABLIITY ANDPRICE-TO-BOOK RATIOS1 FINANCIAL STATEMENT ANALYSIS OF EVERAGEThe following inimical statement analysis separates the eff

2、ects of enhancing liabilities and operating liabilities on the portability of shareholders equity. The analysis yields explicit leveraging equations from which the specications for the empirical analysis are developed. Shareholder portability, return on common equity, is measured asReturn on common

3、equity (ROCE) = comprehensive net income common equity (1)Appropriate inimical statement analysis disentangles the effects of leverage. The analysis below, which elaborates on parts of Nazism and Penman (2001), begins by identifying components of the balance sheet and income statement that involve o

4、perating and enhancing activities. The portability due to each activity is then calculated and two types of leverage are introduced to explain both operating and enhancing portability and overall shareholder portability.1.1 Distinguishing the Portability of Operations from the Portability of Financi

5、ng ActivitiesCommon equity =operating assetsfinancial assetsoperating liabilitiesFinancial liabilities （2）The distinction here between operating assets (like trade receivables, inventory and property, plant and equipment) and inimical assets (the deposits and marketable securities that absorb excess

6、 cash) is made in other contexts. However, on the liability side, enhancing liabilities are also distinguished here from operating liabilities. Rather than treating all liabilities as enhancing debt, only liabilities that raise cash for operationslike bank loans, short-term commercial paper and bond

7、sare classier as such. Other liabilitiessuch as accounts payable, accrued expenses, deferred revenue, restructuring liabilities and pension liabilitiesarise from operations. The distinction is not as simple as current versus long-term liabilities; pension liabilities, for example, are usually long-t

8、erm, and short-term borrowing is a current liability.Rearranging terms in equation (2),Common equity = (operating assetsoperating liabilities)(financial liabilitiesfinancial assets) Or Common equity = net operating assetsnet financing debt （3） This equation regroups assets and liabilities into opera

9、ting and enhancing activities. Net operating assets are operating assets less operating liabilities. So a arm might invest in inventories, but to the extent to which the suppliers of those inventories grant credit, the net investment in inventories is reduced. Firms pay wages, but to the extent to w

10、hich the payment of wages is deferred in pension liabilities, the net investment required to run the business is reduced. Net enhancing debt is enhancing debt (including preferred stock) minus inimical assets. So, a arm may issue bonds to raise cash for operations but may also buy bonds with excess

11、cash from operations. Its net indebtedness is its net position in bonds. Indeed a arm may be a net creditor (with more inimical assets than inimical liabilities) rather than a net debtor.The income statement can be reformulated to distinguish income that comes from operating and enhancing activities

12、:Comprehensive net income = operating income net financing expense (4)Operating income is produced in operations and net inimical expense is incurred in the enhancing of operations. Interest income on inimical assets is netted against interest expense on inimical liabilities (including preferred div

13、idends) in net inimical expense. If interest income is greater than interest expense, enhancing activities produce net inimical income rather than net inimical expense. Both operating income and net inimical expense (or income) is after tax.3 Equations (3) and (4) produce clean measures of after-tax

14、 operating portability and the borrowing rate:Return on net operating assets (RNOA) = operating income net operating assets (5)And Net borrowing rate (NBR) = net financing expense net financing debt (6)RNOA recognizes that portability must be based on the net assets invested in operations. So arms c

15、an increase their operating portability by convincing suppliers, in the course of business, to grant or extend credit terms; credit reduces the investment that shareholders would otherwise have to put in the business. Correspondingly, the net borrowing rate, by excluding non-interest bearing liabili

16、ties from the denominator, gives the appropriate borrowing rate for the enhancing activities.Note that RNOA differs from the more common return on assets (ROA), usually denned as income before after-tax interest expense to total assets. ROA does not distinguish operating and enhancing activities app

17、ropriately. Unlike ROA, RNOA excludes inimical assets in the denominator and subtracts operating liabilities. Nissan and Penman (2001) report a median ROA for NYSE and AMEX arms from 19631999 of only 6.8%, but a median RNOA of 10.0%much closer to what one would expect as a return to business operati

18、ons.1.2 Financial Leverage and its Effect on Shareholder Portability From expressions (3) through (6), it is straightforward to demonstrate that ROCE is a weighted average of RNOA and the net borrowing rate, with weights derived from equation (3):ROCE= net operating assets common equity RNOAnet fina

19、ncing debtCommon equity net borrowing rate (7)Additional algebra leads to the following leveraging equation:ROCE= RNOAFLEV（RNOAnet borrowing rate) (8)Where FLEV, the measure of leverage from enhancing activities, isFinancing leverage (FLEV) = net financing debt common equity (9)The FLEV measure excl

20、udes operating liabilities but includes (as a net against enhancing debt) inimical assets. If inimical assets are greater than inimical liabilities, FLEV is negative. The leveraging equation (8) works for negative FLEV (in which case the net borrowing rate is the return on net inimical assets).This

21、analysis breaks shareholder portability, ROCE, down into that which is due to operations and that which is due to enhancing. Financial leverage levers the ROCE over RNOA, with the leverage effect determined by the amount of inimical leverage (FLEV) and the spread between RNOA and the borrowing rate.

22、 The spread can be positive (favorable) or negative (unfavorable).1.3 Operating Liability Leverage and its Effect on Operating PortabilityWhile enhancing debt levers ROCE, operating liabilities lever the portability of operations, RNOA. RNOA is operating income relative to net operating assets, and

23、net operating assets are operating assets minus operating liabilities. So, the more operating liabilities a arm has relative to operating assets, the higher its RNOA, assuming no effect on operating income in the numerator. The intensity of the use of operating liabilities in the investment base is

24、operating liability leverage:Operating liability leverage (OLLEV) =operating liabilities net operating assets (10)Using operating liabilities to lever the rate of return from operations may not come for free, however; there may be a numerator effect on operating income. Suppliers provide what nomina

25、lly may be interest-free credit, but presumably charge for that credit with higher prices for the goods and services supplied. This is the reason why operating liabilities are inextricably a part of operations rather than the enhancing of operations. The amount that suppliers actually charge for thi

26、s credit is difficult to identify. But the market borrowing rate is observable. The amount that suppliers would implicitly charge in prices for the credit at this borrowing rate can be estimated as a benchmark:Market interest on operating liabilities= operating liabilitiesmarket borrowing rateWhere

27、the market borrowing rate, given that most credit is short term, can be approximated by the after-tax short-term borrowing rate. This implicit cost is benchmark, for it is the cost that makes suppliers indifferent in supplying creed suppliers are fully compensated if they charge implicit interest at

28、 the cost borrowing to supply the credit. Or, alternatively, the arm buying the goods or services is indifferent between trade credit and enhancing purchases at the borrowing rate.To analyze the effect of operating liability leverage on operating portability, we dine:Return on operating assets (ROOA

29、) =(operating incomemarket interest on operating liabilities)operating assets (11)The numerator of ROOA adjusts operating income for the full implicit cost of trade credit. If suppliers fully charge the implicit cost of credit, ROOA is the return of operating assets that would be earned had the arm

30、no operating liability leverage. suppliers do not fully charge for the credit, ROOA measures the return fro operations that includes the favorable implicit credit terms from suppliers.Similar to the leveraging equation (8) for ROCE, RNOA can be expressed as:RNOA= ROOAOLLEV(ROOAmarket borrowing rate)

31、 (12)Where the borrowing rate is the after-tax short-term interest rate. Given ROOA, the effect of leverage on portability is determined by the level of operating liability leverage and the spread between ROOA and the short-term after-tax interest rate. Like enhancing leverage, the effect can be favorable or unfavorable: Firms can re