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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。
" @5 G" g2 E9 P* ?1 i& U7 F
) I5 G8 ]0 J( XGM Overview
5 j! }' _6 _% h7 e( T• Role, Timing, Issues/Decisions, C&Cs
1 v, s, e% k' H# ?• Objectives+ `+ [8 J, l3 H# X) J! }+ Y9 i
– What do we “WANT” to do?4 M k0 T1 y+ V
• External Analysis8 \; X4 W$ ~7 f8 X
– What do we “NEED” to do?
9 R' W5 U; [9 l. J+ N9 z– PEST, Consumer, Competition, Trade7 F- z; h S3 e+ P J5 P( M) o
• opportunities & threats5 t+ A7 ^ q4 N+ J- u
– IMPLICATIONS: KSFs
, `8 K+ J/ s( g3 B# s1 N• Internal Analysis4 m3 ~% Q7 j7 O. c
– What “CAN” we do?$ p8 Y8 s' H p3 U) v
– Finance, Marketing, Ops, HR' u8 F% `7 s3 C9 p( \) a0 F
• abilities, strengths & weaknesses
5 c0 f- B- |/ z- u" I– IMPLICATIONS: KSFs, CORPORATE CAPABILITIES
q' P; O4 C3 y& X8 k7 {- w5 V
/ W" I5 L! y3 |+ F: A: K• Alternative Evaluation1 a, _6 Z7 }% g5 I& M5 U
– What are the options?
, N1 [( q' Z g# u0 y3 u- C– Evaluate the pros & cons of the options
9 P5 [/ P( d! b, v; w" b! A3 d– How does this option “FIT”?* L' C, `3 e5 i1 @+ U: |. m H
– (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)0 b9 g) ]# c9 t7 J* H0 h# q
– Financial Feasibility (of AT LEAST 2-3 options that might “work”)
. x: k2 f4 [# p& z& {$ R1 d# f" @3 w# S8 x
• Decision
) K6 X& D9 a) v* ]; S" ~2 c– Justify why you chose a particular option(s).
]7 i7 c; Z7 a I: J! F$ I– YOU SHOULD BE CONVINCING7 e+ m* W7 V/ @5 p" s' U2 q: \
• Which strategy best meets the firm’s objectives?% s) [" |% _) ]1 H' m
• Does it satisfy the personal objectives as well?5 c6 N- z7 l9 e: K6 _& R8 }
• Have you addressed the cons of the chosen alternative?
: [ \" I# C0 l+ V* H• Is this decision consistent with the analysis you’ve done? EXPLAIN! (FITS)
; u2 i3 X+ Y$ R" l• Why NOT the other options?5 V7 G# W& ?# S. j3 N# c8 T
• How does this choice affect Finance, Marketing, Ops and HR? What changes
1 v/ b1 c# ~5 nneed to be made?
/ `" r: \" L: Y4 {
3 Z# ~" K. o. K* F- q' `$ X• Action Plan
8 L( x/ \. O: }2 m• Map out a clear and precise implementation plan which includes;; J2 ^" Z+ P$ ]& Y. z" g
– details which address what steps you have to take to implement your
& u3 t4 M9 g) @decision' \1 s/ a7 s2 x! l Y+ I/ I: T- f) Y6 ^
– details about timing' _: d) b# M# ]7 }! C# f+ `
– details about WHO will be responsible for accomplishing the ‘task’# |# m9 ?! n- F* T
– how will you follow-up your plan (measure success)$ P2 }1 [ E# n$ D+ s( A( I3 R
– make sure to consider both the short term and long term o, v' X- }% R$ ^6 t( O
9 Y" R: Z3 m5 W4 d; L- Q& {Firm Valuation
/ e+ F/ N# h- {/ M9 E$ \• Used to help managers determine the “price” of a company.
5 ^3 T% d( |/ Z, N6 U6 W2 s• 3 methods of valuing a firm;
* M$ s' ]7 ~. T' {$ ?- O– Net Book Value
$ c3 i4 [. v% ]$ H– Economic Appraisal
, ?9 F! ^5 N; l; ]; g– Capitalization of Earnings
2 w( _+ Q, p! ^" S1 z/ L o- }• Using all 3 methods (if possible) helps us to determine a RANGE of what the
/ s: s* ~ F k4 ~& fcompany is worth.
( n9 p! Y. m" J c( k• THINK!!! What are you really selling? Will anyone pay for it? How much will they pay???
w8 H; [) R1 h# U* ^/ v& E7 s5 U" k
2 d( P+ L ~* o3 Z' R9 J7 @ Net Book Value (NBV)
9 Y; B. X2 _) v, _( h& [ Q( v– Total Assets - Total Liabilities
/ h7 M6 Q0 u5 E. p) z1 E% L• a.k.a.. the equity
) k# V1 L8 T( R1 ?% N– Does not account for the present market value of the assets
0 j( P5 {6 |$ k9 U– Calculated using the most recent given balance sheet D! F1 |5 i- @
– Preferred method for banks, creditors, and/or buyers who are interested in selling off the assets of the business9 |' g8 v. j+ C6 @/ ^
. b/ \- s+ ]% _9 D* M' J( S Economic Appraisal (EA)6 Q5 O' e2 C/ L: R! l( ]
– Similar to NBV, but tries to reflect the current market value of the assets
6 O3 H# I" W; u ~3 _– Total Appraised Assets – Total Liabilities
7 z' K1 x2 z. N% k– Preferred by buyers who are interested in a company for its assets& H$ X2 `+ Q' Q! k3 M7 x4 E
+ q2 {' C. T" Z6 A, Y5 \
Capitalization of Earnings (CE). ]) }2 h7 A% C
– Focuses on the I/S instead of the B/S
) f1 I2 v; c g/ x" }3 _0 W• Attempt to value the company in terms of the future income it may provide.
+ b$ y5 z- h% [ I5 J– NPAT * P/E ratio = value
. I- \( @& ?- M2 J' c– Must evaluate two different earnings figures (to determine risk & range)/ h0 r0 f' Z2 `9 @% i
• Assuming changes (projected statement)
5 | ? A/ Y4 b• Assuming no changes (current given I/S)* _+ ^* f, u: `4 `
– Select a reasonable P/E multiple8 q/ e/ C; |- p7 U
– Preferred by buyers interested in the ongoing operation of the company (i.e.taking over as management)" r& K+ p- i, y2 G/ l
+ ]4 ^2 v& v* \7 G5 J' l3 s• P/E Multiple0 ~: d( u" z C8 |8 w
– Rules of thumb;
. m& r, w. Q4 z1 t8 V• Mature industries with stable earnings tend to have multiples7 H: S7 m" Q4 i$ s
from 5 to 15.; S. r6 f* N3 x4 F4 A
• High growth industries tend to have multiples exceeding 20.
c) w; I# y( y' H; n• “Growth is good; risk is rotten!”/ W1 t& V+ }# X6 m- _6 m' P* Q# q
– growth increases a multiple7 U, V# u% ?3 _
– risk decreases a multiple
; N: n) m4 x. i( w. g) Y& O" w1 `' `1 x6 w9 c8 l' N
Their Associated Ratios
: Z8 v1 k, t9 g9 l! F: P3 t• Profitability;
9 Y ^. Y1 g5 M% U9 z% I) G+ V– Business goal - to make $$
/ |+ Z5 ~7 `# o& w% u– Ratios measures how much money we had to spend to make $X in sales
" n J' G* I5 P$ |% S/ U7 }* N• Stability;7 j: h# N3 [, E) k4 r/ p
– Business goal - to have a stable financial structure (balance its ownership of assets with debt and equity). p; M2 d& `6 a: x. d
– Ratios measure the firm’s means of financing assets and ability to pay interest on debts
1 U7 W& i- c3 F% z O: x! Q6 E+ m# ]) k, y- U! Q) R
5 Financial Goals &Their Associated Ratios1 D: @; [3 p) \$ j
• Liquidity;: N7 b( w+ n% \3 F' L; Q
– Business goal - ability to meet s-t obligations
$ ?% `$ u% |5 w) z4 i– Ratios measure how liquid the firm is (how able the firm is to pay its shortterm1 r, {3 S0 m% b7 J
obligations)
7 B) J9 \4 c7 J# C) p• Efficiency;/ U7 j4 l2 D7 X1 s6 B" d3 V* i
– Business goal - to efficiently use assets9 w' P9 k6 J- V1 a' G
– Ratios tell us how efficiently we are using our investments
- c/ ] D# h5 M5 j- y0 v6 d6 i5 \6 \# I* O0 |
• Growth;
# |6 c; k6 W0 w– Business goal - to increase in size
6 `' h6 v4 x6 D3 U– Ratios tell us whether the company is achieving any growth+ n0 [ x0 B& s2 o0 M% H
/ ]& G1 b+ c8 Z2 F3 ]. n
Interpreting the Ratios
, r. h- ?. C" c7 V8 I( x* w• Profitability;
9 p- j3 O: \- e! _– Vertical Analysis (of I/S)
. ~ P N, Q T! Q" N. x, j( c& n9 II/S items * 100 = %
, B+ s8 n2 }6 h Sales
; ]' C3 b- P0 \• Tells us it cost us X% of sales to make those sales
& ^9 B; d, `7 }; b4 O– Return on Investment/Equity
. { ?5 ]9 t4 C( N5 T7 N1 J& NProfit ATB4D = %
) q) u4 ?: E! O. w: ] _. nAverage Equity
# k5 @4 r9 P: `6 l: x/ x; g2 G[(Yr. 1 E + Yr. 2 E)/2]/ V& K& `& |5 Z" t v
• Tells us how much profit we made relative to the investment made by the owners3 ~" M b8 V' @) I8 g
& G! F5 s k7 [: b7 z• Stability;$ E& q4 u6 ~' n( P0 p; v
– Net Worth: Total Assets
/ f i, h& m9 U+ |' ^) p% T% V( CTotal Equity = % 7 h, Z$ d" `8 x! `, g8 ]4 Q
Total Assets4 g% I. b+ O/ p. z% k
• tells us what % of assets were financed through owner’s money. o8 C3 l! A9 I- r$ a& f: C
– Debt to Assets6 m5 i1 L0 i2 _ u: Q1 X
Total Debt = % x0 C! V1 k3 S% [1 ?
Total Assets9 S* ]- e5 L4 m9 Y& l; l+ Y
• Tells us what % of the assets were financed through debt8 O/ u% W0 N8 H _. Z) G- @
– Interest Coverage. U/ p( c( Y, ?" u
EBIT = # times
" M7 t5 p: ?* y8 G# V$ jInterest Expense' U9 Z9 N7 k& r' ?. N0 j
• tells us how many times we can pay interest+ z; u/ z" w% i. t0 t1 s
$ c- R4 s7 x E0 q' B1 I& U
• Liquidity;* }6 Q B9 s2 m/ i! q
– Current Ratio& Y7 x0 N ~$ u" b
Current Assets = X:1 E; l4 A+ C1 Y
Current Liabilities
. @8 P* c" p6 e" ]4 Z• Tells us, if we liquidated all our current assets, how many times we can pay our debts
( V) [9 y0 \! YRULE OF THUMB: 2:1
7 R! { l* m2 g2 X6 @& X– Acid Test$ d' v2 t2 s( I
Cash + M/S + A/R = X:1, T2 Y* j# B4 U
Current Liabilities" i5 F! a s3 F D
• Tells us how many times we can pay our debts with the money easily available to us
7 P8 }) c% K: [* N+ V& _RULE OF THUMB: 1:1
& N8 r8 ?% t7 H& @( [
& I5 [* g% @, [– Working Capital1 X+ F4 f* P! X4 N! g1 F
C.A - C.L = $X
- _% F+ x5 H/ u6 W• Tells us how much money we have to work with AFTER s-t debts are paid
9 m' v" i k$ L% A H: O( I- k5 o% P' I G
Efficiency;' V3 f( A; ~ A; k3 J' B& R" x
– Age of Receivables4 q' C( z8 ^( ~
Accounts Receivabl = # Days# m7 g. X/ A7 S& s9 m
(Sales / 365)
2 t# [$ L V( i2 h• Tells us how long it takes us to collect our $$
' J9 I2 j$ s$ X2 E9 L- A, j/ {# @4 q3 B7 i: h! P( ~
– Age Of Payables9 U9 I' G: x* B9 q5 n0 y3 i
Accounts Payable = # Days
( N: c' p! L$ A8 X! R( n(Purchases* / 365)# _- R* ]/ n# p
• Tells us how long it takes us to pay our bills' h- ]1 Q& w6 p6 n2 d. g
* s K: Q& O# s' M7 h2 F
– Age of Inventory4 b6 Y* d+ k' A; r
Inventory = # Days7 z8 w* W0 [* H9 a9 Y% T+ X
(COGS / 365)
6 H5 j9 A0 y# y7 x• Tells us how long we are holding on to our inventory in the warehouse
; [ a- K5 t& V; u8 X6 k' Q6 _: s& l0 z; q3 H6 n5 g
• Growth;3 {: A+ d: Z" [ P
– Sales
7 U' |5 V2 N1 J* P– Net Income
3 a D3 [9 E8 K– Total Assets4 J( |9 u/ k1 `" g
– Equity5 g8 P/ O3 ~' v$ v' A
Yr. 2 - Yr. 1 = %
8 i$ E- T1 k9 v Yr. 1
3 x3 e# R6 S" O" H: w9 S; b• Tells us whether the accounts are growing (and hence the company)$ ?: i# }# X2 e( G! o
1 Z- C6 `/ q' `Understanding Ratios" E# |# J3 c4 D0 E0 |; G
• DO NOT CONCLUDE THAT “THE RATIO IS GOOD/BAD”/ p7 N" [/ u1 D, U( J) b* i
• Either the NUMERATOR or the DENOMINATOR affects the ratio1 S& M2 b" A9 @. z+ w" g
• Ask yourself: “WHY HAS THE RATIO CHANGED & WHAT DOES THIS MEAN?”
4 }" q3 R2 z% t" E# S– Which number caused the change?
" X1 _9 w3 ~( C– Look for increasing or decreasing trends over time.' F0 A1 u4 P. ~9 q q9 U
– Will these trends continue?4 D# P+ J: g! V) @/ j
– How does the company compare to the industry?" `' [5 F9 S$ {; @8 C4 @ I
+ N* j) m5 p) B4 H' g
/ W$ f. |4 g% C2 B! lClassifying Costs+ _3 o6 C: Q0 ~" f# L+ u, ` i3 g
• Variable Costs u% b- K# _- A9 _! E" `, p* [- R/ z
– a cost incurred with every unit sold/produced (volume)8 y( e( G; X* n0 f5 T) x5 W* `
• Fixed Costs
/ L0 H1 z e7 X3 A6 i1 h- f– cost that does not vary with volume |
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