財(cái)務(wù)分析與證券定價(jià)(英文)chapter5

Chapter5AccountingMeasurementandValuationfromEarningsForecasts1AccountingMeasurementandValuationfromEarningsForecastsChapter4examinedvaluationsfromforecastsofdividendsandcashflowsLinktoPreviousChapterLINKSThischapterexaminesvaluationsbasedonforecastsofearnings.ItalsoshowshowearningsarecalculatedtomeasurevalueaddedinoperationsThisChapterChapter6willpresentavaluationmodelthatcombinesearningsforecastswithbookvaluesLinktoNextChapterLinktoWebPageHowareearningsmeasured?Howdoearningsdifferfromfreecashflows?Howisthebalancesheetmeasured?Whatisthedifferencebetweenearningsandstockreturns?Whatisthedifferencebetweenaccountingratesofreturnandstockratesofreturn?Canearningsforecastsbeusedtovaluefirms?2WhatyouwilllearninthischapterTheprinciplesofaccountingmeasurementThedifferencebetweenearningsandcashflowfromoperationsHowaccrualsandtheaccountingforinvestmentaffecttheincomestatementandthebalancesheetTheconceptofcomprehensiveincomeanditsimportanceforvaluationTherelationshipbetweenearningsandstockreturnsWhystockratesofreturnandaccountingratesofreturndifferWhyvaluationsbasedonforecastingearningscanbeinerrorHowmultiyearearningspayoffsarecalculatedHowearningsyieldscreenswork,ordon’twork3TheIncomeStatement:Genentech,Inc4TheIncomeStatement:

CadburySchweppes5FeaturesoftheIncomeStatement1.Dividendsdon’taffectincome2.Investmentdoesn’taffectincome3.ThereisamatchingofValueadded (revenues)Valuelost (expenses)Netvalueadded (netincome)4.AccrualsadjustcashflowsRevenueAccrualsExpenseAccrualsValueaddedthatisnotcashflowAdjustmentstocashinflowsthatarenotvalueaddedValuedecreasesthatarenotcashflowsAdjustmentstocashoutflowsthatarenotvaluedecreases6TheRevenueCalculationRevenue=Cashreceiptsfromsales +Newsalesoncredit

Cashreceivedforpreviousperiods'sales

Estimatesofcreditsalesnotcollectible

Estimatedsalesreturns

Deferredrevenueforcashreceivedin advanceofsale +Revenuepreviouslydeferred.7TheExpenseCalculationExpense=Cashpaidforexpenses +Amountsincurredingeneratingrevenues butnotyetpaid

Cashpaidforgeneratingrevenuesinfuture periods +Amountspaidinthepastforgenerating revenuesinthecurrentperiod.8EarningsandCashFlowsEarnings=[C-I]-i+I+accruals =C-i+accrualsTheearningscalculationaddsbackinvestmentsandputsthembackinthebalancesheet.Italsoaddsaccruals.9EarningsandCashFlows:

Wal-MartStores10Accruals,Investmentsand

theBalanceSheetAccrualsandinvestmentsareputinthebalancesheetShareholders’equity=Cash+OtherAssets-LiabilitiesEarningsCashfromOperationsAccrualsFreecashflowCashfromOperationsInvestments11UpdatingtheBalanceSheetCashfromoperations+Accruals EarningsIncomeStatement1998InvestmentanddisinvestmentbyownersEarningsNetchangeinowners’equityStatementofShareholders’Equity1998Cash1+OtherAssets1TotalAssets1-Liabilities1 Owners’equity1BalanceSheetYear1CashfromoperationsCashfrominvestingDebtfinancingEquityfinancing NetchangeincashCashFlowStatementYear1Cash0+OtherAssets0TotalAssets0-Liabilities0 Owners’equity0BalanceSheetYear0BeginningStocks Flows EndingStocks12TheBalanceSheet:Genentech13TheBalanceSheet:Genentech14TheBalanceSheet:

CadburySchweppes15TheStocksandFlowsequationThebalancesheetprovidesameasureofthestockofowners’valueatapointintime:B0Earningsintheincomestatementrepresentstheflowofvalueaddedbetweentwopointsintime:Earnings1Dividendsare(net)flowspaidbacktotheownersbetweentwopointsintime:d1Earningsareaddedtobookvalueanddividendsarepaidoutofthebookvaluesothat:whichshowshowthebalancesheetandincomestatementarticulate.Thisiscalledthestocksandflowsaccountingequation.16TheStocksandFlowsequationAssetsLiabilitiesEquityEquityEquityEquityEarnings1Earnings2TheUpdatingEquityGrowthYear2Year1

17ArticulationofStocksandFlows:SouthwestAirlines18AccountingEarningsandStockReturnsAccountingearningsmeasurevalueaddedinoperationsandstockreturnsarethepricingofvalueaddedinthemarketTheone-periodstockreturnisdefinedasFromthestocksandflowsequationthereforeisthepremium,so19EarningsandStockReturnsforSouthwestAirlines20Cleansurplusincome,orcomprehensiveincomeiscalculatedas:Comprehensiveincome=incomeintheincomestatement+incomeitemsinequityModificationforDirtySurplusAccounting:Genentech21EarningsandStockReturnsfor

Genentech,199522Dirty-SurplusAccountingUK:CadburySchweppes23BookRateofReturn&StockRateofReturnThestockrateofreturn(SRR)foroneperiod:Thebookrateofreturnoncommonequity(ROCE):Somecases:Case1:P1=B1andP0=B0.Then,SR=EarningsSRR=ROCECase2:P0>B0and(P1-B1)=(P0-B0).Then,SR=EarningsSRR<ROCECase3:P0=B0and(P1-B1)>(P0-B0).Then,SR=Earnings+DpremiumSRR>ROCEIngeneral,therelationshipwilldependonboththesignofP0-B0(initialpremium)andthechangeinpremium.24P/B’s,ROCE’sandMeanStockReturns25P/B26P/BandROCE27P/B,ROCEandT-BillRates28MultiperiodEarningsCum-dividendearningsoverTperiods=Earnings1+Earnings2+Earnings3+…EarningsT+TerminalEarningsonDividendsforTPeriodsTwocomponentsofmultiperiodearnings: 1.Totalearnings 2.Totalearningsondividendsreinvested29MultiperiodEarningsandStockReturnsMultiperiodstockreturnsareSubstitutioninthestocksandflowsequationforeachperiodyieldsThreecomponents:AggregateearningsovertheTperiods.EarningsfromreinvestingdividendsChangeinpremium.30EarningsPredictionsandIntrinsicValueCalculations:OnePeriodTheNo-arbitrageconditionrecognizingthatorJustascum-dividendearningsandthechangeinpremiumexplainactualreturns,expectedcum-dividendearningsandexpectedchangeinpremiumexplainexpectedreturns31EarningsPredictionsandIntrinsicValueCalculations:MultiperiodButthisassumesforeknowledgeofVTE!Oneneedsthreecomponentstovaluethestock:AnearningsforecastAdividendforecast(togetearningsondividends)AforecastofthechangeinpremiumEarningsforecastingworksonlyiftheexpectedpremiumchangeiszero.Howfrequentisthis?32RelationshipBetweenCum-DividendsEarningsandReturnsX=Stockreturnoveraten-yearperiod,dividedbystockpriceat