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虽然知道离Busiess020 的最后考试还有一段时间。但是贴出来给大家先有个映像,别到考试的时候抱佛脚。我还会陆续贴出History028E的去年考试卷子。9 ? q9 i- [+ S/ V
! o5 j/ n8 j' ~. s) I) `, P- gGM Overview1 K4 [: E' _; _
• Role, Timing, Issues/Decisions, C&Cs
! V% t( }' s- P5 I/ Y• Objectives
7 P4 v. I6 G9 K, g" F/ m– What do we “WANT” to do?
8 i& C3 B, ~( V# K% l- D& @• External Analysis' P# O# F% h7 L" `# ]# m
– What do we “NEED” to do?
- Y, ~ V* c0 M– PEST, Consumer, Competition, Trade
3 J# a! l0 l, c( m) N• opportunities & threats
Q; A0 s% _* U2 u4 V– IMPLICATIONS: KSFs- b$ x" G! p+ o4 {9 c+ q2 Q
• Internal Analysis
1 S. }, h) k$ v– What “CAN” we do?2 V5 o7 _3 Q; O$ J. J
– Finance, Marketing, Ops, HR
: }/ K* v2 ^ {+ N4 D- y+ W• abilities, strengths & weaknesses( }, M9 U2 L4 g
– IMPLICATIONS: KSFs, CORPORATE CAPABILITIES) Q- J0 b. `) t: d. z0 V
# V( E2 Z# u8 C4 L# ?
• Alternative Evaluation
% d% L3 k# i$ {8 J; w* _– What are the options?" h. X" D- y, J: M8 Q( b
– Evaluate the pros & cons of the options
2 Z, J' B. Y- M# ?; j+ w" O9 z– How does this option “FIT”?* @* P- ?. D- V- M5 p
– (you may be able to eliminate options based exclusively on the poor “FIT”qualitatively - if so, make sure you explain why this option was nixed)+ S `* @5 E9 `
– Financial Feasibility (of AT LEAST 2-3 options that might “work”)
$ }' \0 K: r; `& Z9 i5 u: q, W3 r6 |+ }/ y
• Decision
2 J9 Y! p' O& }3 b( H; `– Justify why you chose a particular option(s). B1 |* S) L! b
– YOU SHOULD BE CONVINCING+ P4 y* L {* i9 x" W( |' G: S
• Which strategy best meets the firm’s objectives?
2 P6 s5 J: t' {3 U8 ^• Does it satisfy the personal objectives as well?
, V: W3 B5 f/ T, D, ~( v1 E• Have you addressed the cons of the chosen alternative?
5 C* g _5 j8 J7 b( X* ^2 x& L• Is this decision consistent with the analysis you’ve done? EXPLAIN! (FITS)6 v- Y. m& r" {2 j `5 D* V4 ?0 v
• Why NOT the other options?
! z5 A- v; z. C! }9 W. ^9 T• How does this choice affect Finance, Marketing, Ops and HR? What changes+ _3 m; W \* s- E- B' @
need to be made?
# A) B/ o1 B; n# W% v
. X3 W7 p% a. e3 F# m: `• Action Plan4 y) Q1 N6 p9 d6 t' t- j# I. l
• Map out a clear and precise implementation plan which includes;) o- J) H+ r+ a2 W
– details which address what steps you have to take to implement your5 D" j/ z2 F2 h: c; q0 p) I% r
decision
4 y Q) C3 o- x/ g" A1 C. f– details about timing
B3 _8 T4 x( w! a7 l' x– details about WHO will be responsible for accomplishing the ‘task’
) o: B: B2 b, l1 G– how will you follow-up your plan (measure success)
- Q& u% i ?! g- n# r$ p5 [– make sure to consider both the short term and long term# u" i7 l% [" z
9 F5 f% T ~9 N! g. hFirm Valuation+ m; }* h: O- ]1 p2 D
• Used to help managers determine the “price” of a company./ r9 C* Q( Y( c9 O6 u
• 3 methods of valuing a firm;
% _% \. Y8 ~& ~5 M/ E– Net Book Value f# R% |2 m& {0 n
– Economic Appraisal
& g: H8 D5 U0 P– Capitalization of Earnings( F1 G" q9 S5 }
• Using all 3 methods (if possible) helps us to determine a RANGE of what the1 Y7 R2 u# q, e) u, h
company is worth.* A2 B3 w6 p1 D6 n1 q# r
• THINK!!! What are you really selling? Will anyone pay for it? How much will they pay???! _. N _' a( i# V3 S
& P3 c- T) \1 }5 R; U Net Book Value (NBV)
) W; {% Y5 W7 t5 ?" P– Total Assets - Total Liabilities
8 V" P# f" P6 E" s• a.k.a.. the equity
2 @* g$ z) r5 ~* T; b# j, ]– Does not account for the present market value of the assets
0 C* X! ~7 E9 u$ }5 ~2 S8 t3 w– Calculated using the most recent given balance sheet
; T5 g0 g4 ^3 Y$ b– Preferred method for banks, creditors, and/or buyers who are interested in selling off the assets of the business
9 m" B. R( O) X8 A- }; n5 @/ {) g$ ?! {9 c# r; s
Economic Appraisal (EA)2 S' [$ x3 }9 U% e
– Similar to NBV, but tries to reflect the current market value of the assets
8 t. Q ^. K( i ]: Q2 _– Total Appraised Assets – Total Liabilities+ {+ @& L" o4 V2 [7 {& r
– Preferred by buyers who are interested in a company for its assets
% m' z) ~) K) k' G7 X) M( J
% F+ O! }( W+ J/ H K Capitalization of Earnings (CE)
`# N' g9 Z1 Y– Focuses on the I/S instead of the B/S
2 \8 Z% |+ M2 d* R. r7 g4 Q• Attempt to value the company in terms of the future income it may provide.
9 l! c p/ ~9 a* D. Z) M0 q– NPAT * P/E ratio = value2 Z6 p6 n% ^/ Z: k. m5 z, u0 O
– Must evaluate two different earnings figures (to determine risk & range)
7 n# V$ x+ C* d! L2 t• Assuming changes (projected statement)
7 w( w$ ~, [' I( b• Assuming no changes (current given I/S)0 b' F1 I* B3 p5 b& V( _( G6 q
– Select a reasonable P/E multiple8 Z) e, ]( i5 m+ W& n+ i
– Preferred by buyers interested in the ongoing operation of the company (i.e.taking over as management)5 s7 d* q9 j* V W
5 D+ T9 i+ e- @" {5 ^# E, L0 K• P/E Multiple
7 k& j& N" E" B. I5 d+ o– Rules of thumb;
8 Q/ |2 A6 ^: b5 f: }• Mature industries with stable earnings tend to have multiples+ B& D4 j% T( s, x
from 5 to 15.' F. n/ }% W0 r- d
• High growth industries tend to have multiples exceeding 20.. X5 w' B0 K! `' s
• “Growth is good; risk is rotten!”
: o8 `8 h* W$ T# Y/ V– growth increases a multiple: `# [8 L/ s; |1 }. q$ [
– risk decreases a multiple
. I& T1 K7 O4 L8 g; }, T1 U" f5 N0 Z/ V& W! j' m9 N; K
Their Associated Ratios
- _) d& c& l# ?' T' P& s9 c3 y4 Y; M• Profitability;. j4 @0 s+ h6 o f" e
– Business goal - to make $$9 \+ J, o3 N4 _8 K
– Ratios measures how much money we had to spend to make $X in sales0 o$ y/ ^! v5 ~& z9 L
• Stability;, k4 D# J6 ~4 F# _ Q6 I# F
– Business goal - to have a stable financial structure (balance its ownership of assets with debt and equity)* Y6 y1 v/ i; q; V
– Ratios measure the firm’s means of financing assets and ability to pay interest on debts9 `+ C/ ^" j$ h J& {4 T: m
# C( J" j: B+ u {. X$ L5 Financial Goals &Their Associated Ratios
. m4 ~( t7 V8 {( ^5 |( u7 @% J • Liquidity;
3 Y8 R9 r5 s: D– Business goal - ability to meet s-t obligations) ^+ S: h" V. R- n: Y' n' M
– Ratios measure how liquid the firm is (how able the firm is to pay its shortterm
( w; Z9 y$ h, `2 q9 P8 M2 aobligations)3 H- o( `3 p! B$ V; t. ]1 D! a
• Efficiency;# e) L+ E2 {' Z' D0 j3 m
– Business goal - to efficiently use assets7 h/ f" p& c1 ~
– Ratios tell us how efficiently we are using our investments, A3 y4 Y+ H. Y, E! t9 P
5 `& f4 ^$ N9 G3 Y% V: V# V3 K' g• Growth;
$ G/ h+ }1 b, U# N7 y4 P2 ~– Business goal - to increase in size
# K$ ~) A+ h/ R2 T– Ratios tell us whether the company is achieving any growth) J' U, `+ U1 p [, w- N8 O6 R
: P+ e0 v, p, {' r& Z: a7 HInterpreting the Ratios
; F/ d: C+ Z* Q" a• Profitability;" w% Q! t9 I/ d+ n
– Vertical Analysis (of I/S)- p7 w+ n1 O1 h7 m+ B
I/S items * 100 = % 0 E' l3 m6 E# d7 z" K
Sales7 w8 k, O) C+ _1 f1 x6 B
• Tells us it cost us X% of sales to make those sales
! o# A: i7 y& Q8 j9 R4 L8 f– Return on Investment/Equity
- @7 `. U) G8 C/ v5 [Profit ATB4D = % 3 f, e" F, t+ n1 b# a$ w @7 Y& x2 U
Average Equity7 |% Z8 k7 ~0 u Y
[(Yr. 1 E + Yr. 2 E)/2]
5 T+ P. ?% O5 J• Tells us how much profit we made relative to the investment made by the owners4 |* F9 v, o* m ?. B$ f
' B7 j( M' E8 _; a& q: G/ \• Stability;( ~$ }, ^- m' L1 | `8 n
– Net Worth: Total Assets
# g& y+ J: h# M4 n- H1 `Total Equity = % # _4 [# S7 y. T0 [* w4 j2 B0 \
Total Assets
) W D( }$ k' O4 ~5 b, ?" A1 H• tells us what % of assets were financed through owner’s money5 P& W! C( |4 l2 M! M- A S" F
– Debt to Assets
0 N H9 e+ v M# HTotal Debt = %
6 i4 ]1 I5 w0 D% KTotal Assets
0 _. ~* D- N- G: F7 @• Tells us what % of the assets were financed through debt
* p' S0 S( L, n# j– Interest Coverage
6 m$ }6 s( B. [1 ] EBIT = # times
" C! @% N" r0 H3 g8 K* mInterest Expense
7 R# l7 _! j$ w- F: K# S4 _• tells us how many times we can pay interest- n- D, S8 q' H0 b: n2 Z6 [
6 M: e: i( Y& ~+ p o% m- O
• Liquidity;( D% d- U* _, F
– Current Ratio
, T# T& z3 M; v5 m4 @' ?3 m$ eCurrent Assets = X:1
- _" ]; ~/ X( w' ?1 R5 TCurrent Liabilities7 C2 r O, E) Y5 X
• Tells us, if we liquidated all our current assets, how many times we can pay our debts
- \( {& D5 k$ m: cRULE OF THUMB: 2:1
( `; U; D- T' a! B7 l( A0 s3 a– Acid Test
+ d' b% ~9 j: J' a6 o c' JCash + M/S + A/R = X:1
) C3 K1 E/ S) I% c; d _9 ~7 q) v; O% `Current Liabilities
' O5 f1 Y" u. j( ^ B9 x5 @• Tells us how many times we can pay our debts with the money easily available to us
: z$ T; V& `; |5 ?7 [RULE OF THUMB: 1:1- J7 i$ E4 C8 J0 m/ A' _+ d- u
9 H$ t7 M! ]$ h* z
– Working Capital% o8 H' S- [1 t8 q, K& f* j
C.A - C.L = $X6 A& c+ B. @8 Z+ I
• Tells us how much money we have to work with AFTER s-t debts are paid
3 j1 y2 Q2 x* Q ~- w, G. u, N8 `5 C. O9 W
Efficiency;) y7 ^( m. b; C8 r' F
– Age of Receivables3 V2 G+ @; r$ Y) F) F
Accounts Receivabl = # Days8 q) F- L9 P. z! e" i# `2 I; y4 I
(Sales / 365)
3 R* X" }) @* T& y( K5 z3 Q• Tells us how long it takes us to collect our $$
! ^2 c( z/ c" j* x* H7 ?# M8 N) f3 a( w( |# C5 d+ R
– Age Of Payables
: K; d: S/ k. B- G" u5 i% H/ X1 @Accounts Payable = # Days7 J( E" l$ m" c7 p$ N
(Purchases* / 365)' e5 Q% w) [ ] Y1 [# S
• Tells us how long it takes us to pay our bills3 d% z) ?( ?+ J
: a- B5 Q+ z1 ~7 d3 p3 y$ g9 ~– Age of Inventory
3 M" F$ S+ V; E) _5 x% i- J1 G Inventory = # Days) ~. |6 A: T) [ {2 q
(COGS / 365)
8 p" Y0 Z, p! L2 j+ i4 J• Tells us how long we are holding on to our inventory in the warehouse
/ M% e# g7 y o; g* z' c% W4 X( R4 b; _1 |
• Growth;
) J5 C. I6 e6 c) G" M" V( U9 x– Sales" z: u; e6 L N" E
– Net Income
7 \! @0 t: g5 j+ U% ]% j& j' |– Total Assets
! \0 B6 l9 d: v5 O. J" s6 q– Equity
: n# N$ Z! l+ o( O7 d# MYr. 2 - Yr. 1 = %
9 b4 T! W3 F/ G8 E" U Z Yr. 1! M$ [% r5 W' }. b9 p
• Tells us whether the accounts are growing (and hence the company)) B/ u8 t* t5 v+ g, i
6 O" N7 d! A; WUnderstanding Ratios6 z# X9 S1 M. G9 v& |- x
• DO NOT CONCLUDE THAT “THE RATIO IS GOOD/BAD”
5 F# z: r( k5 m4 k- V0 b• Either the NUMERATOR or the DENOMINATOR affects the ratio
) V9 u+ ]4 F* A( v* X) w* Y* Y: j• Ask yourself: “WHY HAS THE RATIO CHANGED & WHAT DOES THIS MEAN?”
& \6 _9 {3 M: y7 U– Which number caused the change?
5 X7 p. ^: H* ?: s, \– Look for increasing or decreasing trends over time.
! B9 W+ x, s, [. j- d: p: l" q2 I- a! C– Will these trends continue?$ c/ `' }6 q! W; v1 @% f+ s
– How does the company compare to the industry?) n0 q' P8 R( W3 B ]
6 \, ?5 B" {/ e$ j- l C. X: |( v- L$ r5 o
Classifying Costs- ?/ ^! N0 b1 c1 A( [, `
• Variable Costs2 D) A8 T; _7 j w
– a cost incurred with every unit sold/produced (volume)
/ p. b" T, J5 h0 c" e0 M• Fixed Costs
8 q5 F( S% i0 R, l9 m p4 }– cost that does not vary with volume |
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