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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。% }: |1 F) b2 K0 ~$ c
l4 e4 U: ]( f- B3 gGM Overview
% S4 u$ G( P. V2 w' u" X• Role, Timing, Issues/Decisions, C&Cs
( x4 x2 j/ s% c! o• Objectives* X; K. R; n& q$ O/ }! k7 E
– What do we “WANT” to do?
' [1 W+ F; }' Y# K0 ]9 Y b1 M& P• External Analysis W) W0 [0 w5 U9 _* l7 g! g
– What do we “NEED” to do?
- o$ i9 K0 c3 G# u! v' y6 g0 E– PEST, Consumer, Competition, Trade. s+ n% [: B- I
• opportunities & threats7 T! z8 D4 A$ m; f: ^9 I
– IMPLICATIONS: KSFs/ T4 g2 o7 G# F3 Z7 y/ {8 `4 U
• Internal Analysis: ]7 w) N2 u7 W) A9 h5 Q
– What “CAN” we do?* x0 A* p4 \9 y0 K* P" v* [" ?
– Finance, Marketing, Ops, HR
0 ]8 h. K9 R" I8 L; t• abilities, strengths & weaknesses
0 {% f& F, h, b: z( Z– IMPLICATIONS: KSFs, CORPORATE CAPABILITIES) o" {6 H. x" q" b
3 \2 x1 e: b( `3 k4 h6 S* @- |3 m- R• Alternative Evaluation
$ r* ~+ @+ n& P1 b" _8 |– What are the options?
+ g" ?1 I4 \. c- n! l9 f& b/ k– Evaluate the pros & cons of the options. t6 V ?: z8 j( v3 U; p: Z a
– How does this option “FIT”?
0 Z% ?$ o. q, F8 F– (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)3 f4 b4 Y2 |$ e. N
– Financial Feasibility (of AT LEAST 2-3 options that might “work”)
6 e' C) X: U! ~5 |' Z9 g) k. G" X" p K8 U6 G' j3 t7 M! Z
• Decision
- l0 `8 ?. j8 D% G" U– Justify why you chose a particular option(s).
: }( E! A" l1 m" D& z% o% f3 K– YOU SHOULD BE CONVINCING
% o+ P$ l! s% v# K" e• Which strategy best meets the firm’s objectives?
1 r' @1 F4 ~$ ~) e% \0 `$ Q" @• Does it satisfy the personal objectives as well?
) ?2 ?! [4 t: @# {& U• Have you addressed the cons of the chosen alternative?4 S" F& g, k2 E: r9 a
• Is this decision consistent with the analysis you’ve done? EXPLAIN! (FITS)
, U# C; h/ @# U/ b• Why NOT the other options?# k4 p; D6 x4 a, O% D
• How does this choice affect Finance, Marketing, Ops and HR? What changes2 G/ O; x( W% n) ~& F' `! v. T+ |
need to be made?
/ Y5 h' X9 E# D- _8 T* d: T/ L& T: |! D6 b3 m
• Action Plan/ c0 D3 i4 t* g8 ?/ Q' g( ]5 u: o
• Map out a clear and precise implementation plan which includes;
' w2 n% G5 Z0 M u– details which address what steps you have to take to implement your0 L( q. v. F0 T. [: A* {# L
decision4 T) {. i/ H6 q4 }* O! M
– details about timing
9 {2 H/ M: [9 M; S/ x0 x– details about WHO will be responsible for accomplishing the ‘task’
C) N3 R- P) y) x* H! P+ T– how will you follow-up your plan (measure success)
1 z6 q$ P- a' W6 T( ?– make sure to consider both the short term and long term. o- }2 Q$ l$ @- |8 E1 x: s
( j7 }/ z& Z5 G, M* R$ S
Firm Valuation
+ Q5 g3 ^: }( f; |$ X' ^7 M$ k• Used to help managers determine the “price” of a company.4 X+ _- N# D0 [9 W" f$ Q
• 3 methods of valuing a firm;+ z5 ^8 o6 i8 `% d( @, T' _* t
– Net Book Value
# h5 l, m% F- K' }. P* d. C– Economic Appraisal
$ d& e6 {6 R5 @* r0 N3 H– Capitalization of Earnings: Y2 [/ O( k1 I @
• Using all 3 methods (if possible) helps us to determine a RANGE of what the
3 h& P0 E$ q) c7 o9 |company is worth.7 F% g4 w: w% q
• THINK!!! What are you really selling? Will anyone pay for it? How much will they pay???
; @) q# \) F6 L$ Q) x0 R+ \2 b8 e! V5 k7 l; o% ]. X3 n
Net Book Value (NBV)
& q+ s' N$ j/ o6 E9 K– Total Assets - Total Liabilities+ F3 m3 a+ v! {1 l0 I
• a.k.a.. the equity
F* n* F( k$ V) q ^– Does not account for the present market value of the assets. I; v' C' f$ A) O1 I
– Calculated using the most recent given balance sheet1 U" @9 A1 @/ h6 P
– Preferred method for banks, creditors, and/or buyers who are interested in selling off the assets of the business
: e* c1 ^; @3 k3 _% r" N
4 ]% Z- w, A- Y5 x Economic Appraisal (EA)
+ e, Y4 s6 E4 d$ j– Similar to NBV, but tries to reflect the current market value of the assets
/ a, W; O3 d6 Y: A+ m+ x3 j- R/ L– Total Appraised Assets – Total Liabilities* u3 l7 a0 _) x& N9 F$ h* R
– Preferred by buyers who are interested in a company for its assets! N ]& ?0 C/ X5 g
6 f. n, q2 x2 ?4 I; A/ X Capitalization of Earnings (CE)
0 H2 z9 o& [0 W5 }4 Q- ~9 z9 p* q– Focuses on the I/S instead of the B/S
2 s0 {$ Q$ e2 W0 p$ z$ Z• Attempt to value the company in terms of the future income it may provide.0 X2 w+ b, d4 N6 k" g& `1 s
– NPAT * P/E ratio = value2 T6 Q8 V7 m4 j
– Must evaluate two different earnings figures (to determine risk & range)
?. }* ?# U/ B: h( y; } e• Assuming changes (projected statement)4 s' ?; j. i+ Q% a
• Assuming no changes (current given I/S)0 z# h/ x* V6 X8 k/ J
– Select a reasonable P/E multiple: H+ d$ Y# ?, r0 G. U- B( G
– Preferred by buyers interested in the ongoing operation of the company (i.e.taking over as management)
. z% E( G$ F3 }' Y Q4 T" E- R; z: r5 `6 M/ Z; `+ |8 m3 z
• P/E Multiple+ }8 D& Y$ `% v0 g3 B6 O- Q/ g3 p" `
– Rules of thumb;- X- o* r4 y* u. _* j* M5 u
• Mature industries with stable earnings tend to have multiples/ m7 h6 _& }4 c+ L4 J/ y" [( C
from 5 to 15.( m: L* n/ ~! W) H& Y; ]* Y8 p3 p. }
• High growth industries tend to have multiples exceeding 20.
8 R4 l% w' C6 r) B" R: y• “Growth is good; risk is rotten!”1 y% C( K/ y* R7 u. K3 h! M
– growth increases a multiple
. j3 Z8 u) l" s6 D6 B– risk decreases a multiple6 N( _! w! H7 Y* y
! P. q5 l# q4 x8 X7 {1 q( U; K
Their Associated Ratios
2 p! m" x8 `1 w9 t. c( p• Profitability;
: S+ ~9 z6 ^' B* ]& z" d7 q– Business goal - to make $$( |# d/ t: m& h3 B, b9 n) i
– Ratios measures how much money we had to spend to make $X in sales; Q6 Z* l! g* i8 x, u
• Stability;7 b% h- \3 v y& {' _
– Business goal - to have a stable financial structure (balance its ownership of assets with debt and equity)* Q) T& o7 L5 J; P' B
– Ratios measure the firm’s means of financing assets and ability to pay interest on debts; w0 _( Z# t& [, [$ F, Z
8 r% W' c: I z5 Financial Goals &Their Associated Ratios& n1 F# B5 p; u3 o. T0 H
• Liquidity;
3 q2 P* ~9 F3 K+ ? B– Business goal - ability to meet s-t obligations5 G* v- Q* n3 F, h# P" T
– Ratios measure how liquid the firm is (how able the firm is to pay its shortterm
$ N, z+ X" {* N$ Robligations)0 k" z9 H* J7 D8 p$ \
• Efficiency;$ z) y7 l& r4 T% M
– Business goal - to efficiently use assets
2 x: s* L. N7 M& O1 Y$ `– Ratios tell us how efficiently we are using our investments, v& }/ }; q/ X3 p
' V3 l3 o& X1 {! Y• Growth;
/ J# k3 W" v# o; {) D$ x: ?- |5 [– Business goal - to increase in size
f! l0 C0 m. [6 T' g+ |" Q( J" L- M– Ratios tell us whether the company is achieving any growth, T6 T" K1 c0 O8 Z
# n) e3 a4 C8 q# ? YInterpreting the Ratios& H# h1 T- `4 F5 T3 t0 P$ B
• Profitability;8 z4 A* h8 m2 n! u4 e
– Vertical Analysis (of I/S)
5 ^0 Y2 m( p/ i% O W1 s2 zI/S items * 100 = % : `" J1 V4 `8 G7 G, j3 G8 _
Sales4 t" P% [1 b) g0 ?4 A
• Tells us it cost us X% of sales to make those sales
7 ]( ]7 z+ o# P2 s, w5 h– Return on Investment/Equity
+ s# v, e5 m2 r0 |Profit ATB4D = %
4 N: f' p: h3 P% p5 i% eAverage Equity/ K% c7 h" ], B. P; p
[(Yr. 1 E + Yr. 2 E)/2]
0 {# H" E; e* |6 g7 d, E2 ~6 t• Tells us how much profit we made relative to the investment made by the owners* p4 Q( H2 b, e. \, T; R; S
6 ~. S; {8 ~7 q" L1 \
• Stability;! H- W) L! b: J+ E
– Net Worth: Total Assets
# U0 u; U, ]1 x, k, c- C" v( |$ aTotal Equity = % % q/ A# X) @; Z4 }
Total Assets
2 y: N8 ?0 E% Y" g4 |% U3 y• tells us what % of assets were financed through owner’s money+ V) x4 }% ]( h: t# {% n
– Debt to Assets: r$ h' M5 q$ P% ?7 u
Total Debt = % * A( L3 x/ B! O9 D+ T! D
Total Assets
3 B' g' b0 I$ L$ C9 w( p( |$ k• Tells us what % of the assets were financed through debt& L8 `. g; K. S# ~
– Interest Coverage7 `/ B5 K" o% `7 }3 B/ w& @
EBIT = # times$ V T% D3 Z5 g2 i6 z! Z! G. t+ R
Interest Expense3 T% r# c# ? J8 v/ a
• tells us how many times we can pay interest
9 O2 n0 f7 n& n+ Y0 W% l; M |) P$ }7 K, L- t- K+ C
• Liquidity;
+ Z& K8 L6 c( _– Current Ratio2 Z3 A+ E; g0 o
Current Assets = X:1. Y: e2 R Z9 G
Current Liabilities+ j8 h9 \2 \6 Q8 u+ {
• Tells us, if we liquidated all our current assets, how many times we can pay our debts
0 s3 f+ \" W2 v. ~RULE OF THUMB: 2:1 M1 r( r# O1 f! C' m- K
– Acid Test* H c) [7 a% f' x% I" S
Cash + M/S + A/R = X:1
: U. u4 V3 X5 f2 W" ]Current Liabilities7 D# P/ ?6 f% Y/ F4 X; W9 C
• Tells us how many times we can pay our debts with the money easily available to us5 V- W; n& X5 N3 B: D/ X
RULE OF THUMB: 1:1, I7 O3 _# V1 ^0 [: y5 W/ }
: R" k) g( u( p- N$ p! [) Z( C1 D
– Working Capital
# c( l1 E: {' F: a0 x7 PC.A - C.L = $X; M4 O& a8 @2 |2 Y+ _8 L M
• Tells us how much money we have to work with AFTER s-t debts are paid
9 r ?6 m- |( `& w$ |
; h# p9 @2 n( r+ q. G( f% V4 @& }3 y* DEfficiency;7 ?, J& s* O; [+ J9 H7 g
– Age of Receivables
) \9 o+ s% j( a. X- yAccounts Receivabl = # Days u2 {) h j- T" U2 _
(Sales / 365)
& H' _3 A+ s0 U• Tells us how long it takes us to collect our $$
5 w) s& }! A( a& c/ B3 d4 h
. ]0 s! E' e$ S, e2 |– Age Of Payables
+ Q7 f/ M6 x4 J# o/ I* b R' d- jAccounts Payable = # Days6 o8 Y9 Z: F' j- s2 h8 E
(Purchases* / 365)' ~( |8 u4 b" Y" q C# x
• Tells us how long it takes us to pay our bills6 z8 e9 H g% E# a& J; I$ c/ x7 L
8 ?. l9 u9 F! [+ @% J2 n7 n {
– Age of Inventory# N0 D s6 @2 @. w
Inventory = # Days5 U3 q2 y& f5 B
(COGS / 365)3 `. N ]' N$ U/ m; w% c& a
• Tells us how long we are holding on to our inventory in the warehouse
( r6 S9 H0 b _* G& A
6 z! R, t6 ^ u; P• Growth;7 t7 f9 L1 ]" h. t) I
– Sales# h9 n; Q% M7 G# z, `2 E
– Net Income# B% d; o! h% i% l5 k
– Total Assets# [% W& p& H2 r" H
– Equity' d" G& f" j9 y! b
Yr. 2 - Yr. 1 = %+ n1 T6 Z/ u7 `8 k- V) T; w p% }
Yr. 1
7 r. U1 g) d' i* `1 J- z7 e( `• Tells us whether the accounts are growing (and hence the company)
7 O+ k2 W N- v5 c( Y7 z: s" M4 I5 ^1 O
Understanding Ratios, n& n: X* j7 R- |# H
• DO NOT CONCLUDE THAT “THE RATIO IS GOOD/BAD”! S, P/ j% s4 q9 J/ h/ C2 v
• Either the NUMERATOR or the DENOMINATOR affects the ratio0 d, {/ y% S" X o/ R ?* e
• Ask yourself: “WHY HAS THE RATIO CHANGED & WHAT DOES THIS MEAN?”
C! e- D5 |3 c5 i% O7 U8 ?/ }- P– Which number caused the change?* H! ], m; c" k4 g
– Look for increasing or decreasing trends over time.) p7 t, U$ l' t+ \. C1 U- F6 a# B( j
– Will these trends continue?
: i) H# b& l; B9 A6 X1 ~7 z/ v– How does the company compare to the industry?
& i8 X1 X4 s2 c: U- m
( l4 n5 B" ^" M2 p* r) R; l; q" p2 N1 d, l# _
Classifying Costs8 s, K* n) b* B1 @% o- [5 ~
• Variable Costs
' \* }+ ?! a) ^# j– a cost incurred with every unit sold/produced (volume)
+ d) ?! f9 |# p' v7 K• Fixed Costs
5 j. Y- t: g( p– cost that does not vary with volume |
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