Professional Documents
Culture Documents
Chapter 29
Eighth Edition
McGraw-Hill/Irwin
29- 2
Topics Covered
Financial Statements ACC
The DuPont System
McGraw-Hill/Irwin
29- 3
ACC
Figures in Rs. Crores
Assets Current Assets Cash and Bank Receivables Inventory Total current assets Investments Fixed Assets: Gross Fixed Assets Less accumulated depreciation Net Fixed Assets Other assets Total assets
McGraw-Hill/Irwin
29- 4
ACC
Figures in Rs. Crores
Liabilities and Shareholders' Equity Current liabilities Debt due within 1 year Payables and provisions Total current liabilities Long-term debt Other liabilities Shareholders' equity Total liabilities & shareholders' equity Mar-04 17.24 851.71 868.95 1425.48 316.97 1353.19 3964.59 Mar-05 200 1022.84 1222.84 1309.07 349.28 1597.19 4478.38 Change + 182.76 + 171.13 + 353.89 -116.41 + 32.31 + 244 + 513.79
McGraw-Hill/Irwin
29- 5
ACC
Other financial information: Market value of equity Average number of shares (crores) Share price (Rs.)
McGraw-Hill/Irwin
29- 6
ACC
Sales Other Income Total revenue Costs Depreciation EBIT Interest Tax Net Income (PAT) Dividends Retained Earnings Earnings per share, rupees Dividend per share, rupees Rs. Crores 4548.92 89.35 4638.27 3908.31 188.82 541.14 96.32 66.43 378.39 142.95 235.44 21.20 8.0
McGraw-Hill/Irwin
29- 7
ACC
Rs. Crores Sources: Profit after tax Depreciation Operating cash flow Issues of Other liabilities Issues of equity Decrease in Working Capital Sale of Investments Decrease in other assets Total Sources Uses:
29- 8
Leverage Ratios
long term debt Long term debt ratio = long term debt + equity
McGraw-Hill/Irwin
29- 9
Leverage Ratios
total liabilities Total debt ratio = total assets
EBIT Times interest earned = interest payments
McGraw-Hill/Irwin
29- 10
Liquidity Ratios
Net working capital to total assets ratio Net working capital = Total assets
McGraw-Hill/Irwin
29- 11
Liquidity Ratios
cash + marketable securities + receivables Quick ratio = current liabilities
cash + marketable securities + receivables Interval measure = average daily expenditures from operations
McGraw-Hill/Irwin
29- 12
Efficiency Ratios
Sales Asset turnover ratio = Average total assets
McGraw-Hill/Irwin
29- 13
Efficiency Ratios
Inventory turnover ratio = cost of goods sold average inventory
McGraw-Hill/Irwin
29- 14
Profitability Ratios
EBIT - tax Net profit margin = sales
McGraw-Hill/Irwin
29- 15
Profitability Ratios
Payout ratio = dividends earnings
McGraw-Hill/Irwin
29- 16
McGraw-Hill/Irwin
29- 17
McGraw-Hill/Irwin
29- 18
ACC Ratios
ACC Leverage Ratios: Debt ratio
a
Cement Industryb
Debt ratio (including short-term debt) Debt-equity ratio Times-interest-earned Liquidity Ratios: Net-working-capital-to-total assets Current ratio Quick ratio Cash ratio
a a
Long-term debt/(long-term debt + equity) (Long-term debt + short-term debt)/(long-term debt + short-term debt + equity) Long-term debt/equity (EBIT + depreciation)/interest
0.45
0.68
Interval measure
(Current asset - current liabilities)/total assets Current assets/current liabilities (Cash + receivables + marketable securities)/current liabilities (Cash + marketable securities)/current liabilities (Cash+marketable securities+receivables)/(costs from operations/365)
56.56
150.55
McGraw-Hill/Irwin
29- 19
(EBIT-taxes)/sales (EBIT-taxes)/average total assets Earnings available for common stockholders/average equity Dividend per share/earnings per share
Stock price/earnings per share Dividend per share/stock price Stock price/book value per share
McGraw-Hill/Irwin
29- 20
McGraw-Hill/Irwin
29- 21
asset turnover
profit margin
McGraw-Hill/Irwin
29- 22
profit margin
debt burden
McGraw-Hill/Irwin
29- 23
ACC
Financial Planning 1. Best case 2. Normal growth 3. Retrenchment
McGraw-Hill/Irwin
29- 24
ACC
Financial Planning Models
McGraw-Hill/Irwin
29- 25
ACC
Financial Planning Models
McGraw-Hill/Irwin
29- 26
ACC
Financial Planning Models
McGraw-Hill/Irwin
29- 27
retained earnings profit after tax equity v v profit after tax equity net assets equity ! plowback ratio v return on equity v net assets
=9.85%
McGraw-Hill/Irwin
29- 28
Web Resources
Click to access web sites Internet connection required
McGraw-Hill/Irwin