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- 2006-3-26
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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。' q8 Z1 L. `* {7 N( I' [8 g0 [
& T: ?( W) q P- eGM Overview
5 r3 N3 A9 H$ R( Q9 I• Role, Timing, Issues/Decisions, C&Cs/ ^5 c( G `5 i3 W+ z4 |
• Objectives7 T! d Y* L' x' Z1 }' E" {- M0 I
– What do we “WANT” to do?
' H2 C, Y: z' p5 @: @• External Analysis* R# ` x# \5 l( f I
– What do we “NEED” to do?
' O E: y4 [ T+ s8 R# }– PEST, Consumer, Competition, Trade( i( z0 U& I& [0 ~6 u4 o1 t) a
• opportunities & threats# `8 D/ H& Z1 _6 W
– IMPLICATIONS: KSFs
, [7 y3 b/ ~+ L• Internal Analysis
( q S) x% j+ l k– What “CAN” we do?& p' J* `$ c$ X
– Finance, Marketing, Ops, HR
3 F* i! }2 D1 i• abilities, strengths & weaknesses
9 v8 C9 _* V$ N; e) z# C2 p% X9 ?% w– IMPLICATIONS: KSFs, CORPORATE CAPABILITIES
$ ~% t: I v- B/ f# e$ Y4 N! P1 I | j y
• Alternative Evaluation/ U: D; R! t2 I w' U! w3 n+ C
– What are the options?
% A* @+ K% V6 z% V' R– Evaluate the pros & cons of the options0 }- T; _1 U E. J [& q9 L( k/ I
– How does this option “FIT”?8 P- F1 N+ b1 b4 b
– (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)) Q5 ]5 Y% V7 q. t5 s
– Financial Feasibility (of AT LEAST 2-3 options that might “work”) % d7 [2 I" v; }5 D5 k
7 |3 S [7 G9 y+ t2 q• Decision6 r0 b3 Q7 C C2 l( g: z/ O- S; J' |
– Justify why you chose a particular option(s).: \# K) N! p$ |7 c6 M
– YOU SHOULD BE CONVINCING q: ?+ y* Y) X# l
• Which strategy best meets the firm’s objectives?
7 v1 v: g7 ?, a% d( a# t9 ~• Does it satisfy the personal objectives as well?4 m1 W7 n; l6 f B2 n5 S6 S
• Have you addressed the cons of the chosen alternative?
: I: I8 _9 W; V3 ^4 c* _2 m• Is this decision consistent with the analysis you’ve done? EXPLAIN! (FITS)
4 s# j( B% ~# H, Z3 U( W( w• Why NOT the other options?
, K5 |. |3 Q# ^9 M# u• How does this choice affect Finance, Marketing, Ops and HR? What changes6 N' m6 h0 {) W& d
need to be made?
. T/ K, y6 @. x' J( K* S$ z* o
0 }, p( _7 n4 z• Action Plan4 c; o$ T4 _* i3 @' u8 F
• Map out a clear and precise implementation plan which includes;
- Z& t, B O [/ w% A, {– details which address what steps you have to take to implement your$ u& m5 Z. n4 s0 L% E/ y
decision6 S) h: {( B2 D9 t- T4 j
– details about timing
, |2 C6 g L0 b& K, P" O– details about WHO will be responsible for accomplishing the ‘task’4 v7 ~, b1 H! v: |7 r& F
– how will you follow-up your plan (measure success)
& P6 y8 ~9 u6 ?" e/ b9 v9 y– make sure to consider both the short term and long term7 i/ ~& r! M8 _% H
# i1 p9 J9 E+ Z5 a1 @Firm Valuation
2 e) V ^" u! W# q" V( \. e• Used to help managers determine the “price” of a company.3 t' P [ g- I- M- S. i4 I
• 3 methods of valuing a firm;
, U. d) I+ T b, F* c; q1 b– Net Book Value6 U1 F9 T. D: w+ u/ C
– Economic Appraisal
. w+ `- d5 G+ {/ e$ h# n% K! d5 Y5 {– Capitalization of Earnings
1 J0 x& V0 u: Q. Y• Using all 3 methods (if possible) helps us to determine a RANGE of what the
# U/ L9 X9 B k/ _, W$ n; Scompany is worth.
L/ B) ]; A3 h1 p* J3 F* G• THINK!!! What are you really selling? Will anyone pay for it? How much will they pay???
5 T9 C T" V! j3 N% }. P; x
4 j& o* o+ a' ^* M8 ` [5 V: X Net Book Value (NBV)
3 ~% K1 h; r: v+ y: h2 A$ N7 I– Total Assets - Total Liabilities* S7 e; R8 K. n" b" X
• a.k.a.. the equity
; K x( S, s3 S# d" F) T# `– Does not account for the present market value of the assets
& I& t l% y, c– Calculated using the most recent given balance sheet2 q% W& L' S5 c. n g) W4 v
– Preferred method for banks, creditors, and/or buyers who are interested in selling off the assets of the business3 J. Y4 d/ x# u. \+ [& Q2 F) e
# O& c/ d. F% b
Economic Appraisal (EA)/ j0 A9 ?3 X4 p; u* q
– Similar to NBV, but tries to reflect the current market value of the assets3 }8 T2 O+ L4 ^ r0 r0 V6 u9 S
– Total Appraised Assets – Total Liabilities
/ O/ z* Z6 D$ j- S. I. z1 ]! F– Preferred by buyers who are interested in a company for its assets( B) q$ f$ X( Y: o; O
( s3 Q. U' F' ~1 t Capitalization of Earnings (CE)4 m1 s5 |$ ]. Q
– Focuses on the I/S instead of the B/S
; P1 x6 I6 D0 \& t1 I• Attempt to value the company in terms of the future income it may provide.0 W2 F* i1 d, ]+ P& f1 k: o0 a6 {
– NPAT * P/E ratio = value3 {, [; V, u# m1 H" M. P
– Must evaluate two different earnings figures (to determine risk & range)
. R8 D1 D) k6 ]1 r0 x5 `• Assuming changes (projected statement)
+ E+ _6 Y& F7 m" n, q9 }• Assuming no changes (current given I/S)
. D; q7 S4 h% C0 x! m% o– Select a reasonable P/E multiple
8 I8 P$ t- m( q8 X t– Preferred by buyers interested in the ongoing operation of the company (i.e.taking over as management)
% w' Y; h' E3 ?& A) }* w+ n# z9 t1 }- W0 ^: ?
• P/E Multiple, e/ q8 K( t; F/ j8 h/ P% X) X
– Rules of thumb;
" [6 X" n: x- S( C6 ?. C• Mature industries with stable earnings tend to have multiples# _$ E# Z `8 _
from 5 to 15.
9 r) J3 t6 c9 ~! Y• High growth industries tend to have multiples exceeding 20.0 g {* k: |; Y) U% j& @$ [
• “Growth is good; risk is rotten!”
/ Q3 n4 f* ~" ]– growth increases a multiple
4 u8 B$ w/ q. C; ?6 T" Z– risk decreases a multiple
1 T X, D; K! m w/ n
- r* S% d" R& L- G A8 O" v7 ]6 QTheir Associated Ratios: M, [% `9 \0 b4 W
• Profitability;
' i! V: T. i" ^- y* X– Business goal - to make $$
% }! T. J; w# O# S– Ratios measures how much money we had to spend to make $X in sales
' R, e" R' [% e; x+ W: y+ H• Stability;
. H6 H. f+ d: ]$ Z/ i– Business goal - to have a stable financial structure (balance its ownership of assets with debt and equity)
7 a9 C: i' x5 ?7 ?9 c) a4 _– Ratios measure the firm’s means of financing assets and ability to pay interest on debts
+ `& P5 d. J) f8 _
5 p4 [/ e+ q6 E* |1 Q/ ?* X5 Financial Goals &Their Associated Ratios& N* y `0 j) P5 d$ P+ k+ F; x
• Liquidity;* P$ r$ J7 a; h' R' n, ^
– Business goal - ability to meet s-t obligations \. C2 q1 C: c7 f0 V; a- Z+ u& ~
– Ratios measure how liquid the firm is (how able the firm is to pay its shortterm' V- H. y+ X2 i, z6 T- {8 k: ?% z0 J
obligations)
; x$ v" m# ~* R# a• Efficiency;' N- C2 [: H7 c. M& l! h3 d
– Business goal - to efficiently use assets
7 p5 s0 W3 F( s! @! e, K6 c– Ratios tell us how efficiently we are using our investments) q4 P- @% Q5 m. r- [4 m
3 V' D2 L, k' @# c" y; W+ q• Growth;
. b* u: A7 l& R– Business goal - to increase in size
5 o( v" A0 X, ]– Ratios tell us whether the company is achieving any growth4 R% r( Q% x+ Z1 \/ @: Q
5 D# n5 v2 `7 Y3 {7 b( q" sInterpreting the Ratios+ a( Y$ O5 N- B! i
• Profitability;! w! s9 k$ ?( L& [9 n f
– Vertical Analysis (of I/S)3 t2 [' g1 [* V& ]
I/S items * 100 = % 4 `3 K/ \8 Z' G3 z, T
Sales
' k7 i) d* x- j( n! }! v: Z• Tells us it cost us X% of sales to make those sales
& `, e4 T6 J# ~: z– Return on Investment/Equity
/ A' A4 w. _% oProfit ATB4D = % : v" V5 t2 _+ ]- u/ d
Average Equity' V9 o" ~# T Z$ f! C/ O
[(Yr. 1 E + Yr. 2 E)/2]( N, I/ H: M& Q* c+ ^! _- u
• Tells us how much profit we made relative to the investment made by the owners
; j" Y* @) T! F, h/ l7 o! _+ a ~+ `2 V
• Stability;3 C# X$ J# q0 J
– Net Worth: Total Assets6 E* ^; R) |+ K$ g a5 a" r
Total Equity = %
9 o T3 j) |. X, q, I3 cTotal Assets
3 I# y/ k3 ?4 j |% f4 }4 t" }• tells us what % of assets were financed through owner’s money
9 o; ] n; m) C# b. L– Debt to Assets
% L6 z% ^- S, N3 h$ {8 R8 p: N' C; p. ?Total Debt = %
# \" w9 |! i' l7 Y1 wTotal Assets9 A5 f# J! q9 \2 n" C. k/ g" H# v
• Tells us what % of the assets were financed through debt0 y5 f# Z+ [) s1 v- H/ {5 J5 G
– Interest Coverage, @, Y( s" n' _7 N* @
EBIT = # times6 Q) Y/ ~8 Z& E; h, y5 v* B
Interest Expense0 @( h1 n( R! A6 a
• tells us how many times we can pay interest
9 Q4 S. `/ c% e0 q; ]# I4 _5 @$ s; Q3 X! n! A2 p/ T R
• Liquidity;
4 C8 F+ ~( E6 @* w0 w– Current Ratio& `& H. o+ g. d( l
Current Assets = X:1
" y# X5 W9 Z/ [Current Liabilities
( B# n- p2 q: a' N• Tells us, if we liquidated all our current assets, how many times we can pay our debts$ Y) y* @# k! \' J+ _
RULE OF THUMB: 2:1
8 v/ x/ b8 _7 H7 p6 x– Acid Test
6 ]0 F1 L0 D; O/ {! a( h) jCash + M/S + A/R = X:1; x8 T4 ~( _. p' V' R3 E
Current Liabilities
* P" e! L0 q0 l( P3 x. e: b• Tells us how many times we can pay our debts with the money easily available to us9 u7 Z6 d0 U' c. C
RULE OF THUMB: 1:1* v" v k+ |4 O) ~5 Q `; p( F
7 v+ Z I- W+ Y2 ~6 z2 L
– Working Capital1 z. A5 Q. c/ T: }+ d4 u
C.A - C.L = $X
/ R% G5 X" f/ o' |2 u- F• Tells us how much money we have to work with AFTER s-t debts are paid& o5 ]$ u3 N, M) k3 \; V
; W' s- |( N+ }0 I* A4 L! dEfficiency;
* {0 C; b, V: T, B4 [$ I– Age of Receivables# Z9 {$ t4 Q7 v% h- B: s
Accounts Receivabl = # Days
. |, z. o( @# p E5 B' U8 [ (Sales / 365); u- Y* ?/ U1 F7 L; ?& v6 q r" `& E* u
• Tells us how long it takes us to collect our $$4 d6 R3 [; n1 h( Z) _8 u
" m2 a w1 B) s" o6 Z0 [6 V5 _: Y– Age Of Payables
2 C! W5 S- O5 s' wAccounts Payable = # Days/ q* O8 W% a. @/ D! L
(Purchases* / 365)
9 G2 @( E; K7 f9 _• Tells us how long it takes us to pay our bills5 n. c1 W! z6 d9 o9 S
4 T! K0 ?+ W: Z `: _, @– Age of Inventory
+ X, _. j2 t2 E$ P) U Inventory = # Days! n$ ~# k0 T8 S
(COGS / 365)4 C9 p" C& ^2 Z3 U, \3 I
• Tells us how long we are holding on to our inventory in the warehouse6 n# L) q9 k7 w1 x5 Q7 F6 ?
1 a7 ~9 D7 \" K$ X* h* L9 Z
• Growth;
1 D2 o, Z) r/ u% v– Sales1 e m3 _" T2 n/ b" E
– Net Income
" R3 t: z$ ?7 @ y– Total Assets
4 C1 r$ E3 ?) L1 ~6 V p– Equity
9 N/ N0 g w t3 W* ?Yr. 2 - Yr. 1 = %
1 l, o# [/ k$ ?' H: M Yr. 1
" X' h7 _3 w; f- {5 h• Tells us whether the accounts are growing (and hence the company)
3 d) Q1 y4 ?0 L+ q! x% E" B# H
2 Z# Z. s, I: ]Understanding Ratios
+ o% [$ ]& c' S& H- D4 P# |% m• DO NOT CONCLUDE THAT “THE RATIO IS GOOD/BAD”
! g6 i2 N, }# f E. u- f* |• Either the NUMERATOR or the DENOMINATOR affects the ratio0 f0 {2 {; r. i4 K
• Ask yourself: “WHY HAS THE RATIO CHANGED & WHAT DOES THIS MEAN?”6 u5 h+ x3 D, U3 X
– Which number caused the change?& b. U( s' B. f5 ]: ]
– Look for increasing or decreasing trends over time.4 ]1 U& k! A5 \
– Will these trends continue?, I/ u: ^% a5 T6 L" h. O/ G4 S
– How does the company compare to the industry?4 x7 n& T3 q+ R# p! x$ Z7 k
6 k/ g3 o2 E/ c: z: j _, O, P
7 j+ _7 P6 U% j& qClassifying Costs
' Z0 R! _/ l' s7 ~• Variable Costs9 j+ u( k9 u* f& q
– a cost incurred with every unit sold/produced (volume)
3 x$ ?9 w% b9 b; w• Fixed Costs# b! @0 O& ~5 R0 [9 ~
– cost that does not vary with volume |
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