2.1 Financial Ratio Analysis

Owing to the different sizes，we could not directly compare between two companies when we get their financial statements.To avoid the problems involved in comparing companies of different size，one of the most important measures is to calculate and compare financial ratios.Financial ratios are traditionally grouped into the following categories：①Short-term solvency or liquidity measures；②Long-term solvency ratios；③ Asset management or turnover measures；④ Profitability measures；⑤Market measures.

2.1.1 Short-Term Solvency Measures

Short-term solvency ratios measure the firm's ability to pay its bills over the short run without due stress.The group of ratios focuses on one firm's current assets and current liabilities，sometimes called liquidity measures.

1.Current Ratio（流動比率）

The current ratio is the ratio of the current assets to current liabilities.It measures the ability of one firm to translate its current assets into cash to pay its current liabilities off.Normally，a current ratio is expected to be 1 ~ 2.A lower-than-1 current ratio means bad short-term liquidity because that net working capital（current asset less current liabilities） is negative，while a higher-than-2 one means good short-term liquidity，but it depends on the specific industries.

2.Quick（or Acid-Test） Ratio（速動比率）

Compared with the current ratio，the number of inventories isn.t taken into consideration in the quick ratio.Because inventory is the least liquid current asset，so the book value couldn.t accurately reflect the market value.Moreover，a large bulk of inventories，however，encumber the liquidity of firms in many circumstances.Similarly，the quick ratio is expected to be 1，but it also varies a great deal across industries.However，an extremely high quick ratio is not a good signal，it means too much cash is occupied by other current assets，which encumber the cash turnover.

Notice that using cash to buy inventory does not affect the current ratio，but it reduces the quick ratio，again，owning to the weakest liquidity of inventory.

3.Cash Ratio（現金比率）

The cash ratio is the ratio of cash to current liabilities.Normally，it is expected to be more than 20%.Because cash is the most liquid current asset，the very short-term creditor might care about the cash ratio.

2.1.2 Long-Term Solvency Measures（長期償債能力比率）

Long-term solvency ratios reflect the firm's ability to meet its obligations in the long run，or its financial leverage，so they are sometimes called financial leverage ratios or leverage ratios.

1.Total Debt Ratio（總負債比率）

The total debt ratio considers one firm's ability to pay off both current liabilities and non-current liabilities，which could be defined as：

Normally，the lower the total debt ratio is，the easier the firm is to meet the obligation in the long term.And the ratio is expected to be 60% for most firms.Moreover，two variations of it are frequently used.

2.Times Interest Earned（利息倍數）

Times Interest Earned measures how well one firm has its interest obligations covered，it's also called the interest coverage ratio.

Normally，the higher the times interest earned is，the stronger ability the firm has to meet the obligations in the long run.The ratio is expected to be 3，and for keeping debt-paying ability，it must be no less than 1.

3.Cash Coverage（現金保障倍數）

The cash coverage ratio measures how well a company has its interest obligations covered.Notice that depreciation and amortization are two accounting concepts but not actual cash flow，but they are deducted from the expense.Actual cash available to pay interest should include the amount of depreciation and amortization，so the cash coverage ratio is defined as：

EBITDA（息稅折舊攤銷前利潤） is not only a basic measure of a firm's ability to generate cash from operations but is also used as a measure of cash flow available to meet financial obligations.

4.Other Useful Long-Term Solvency Ratio

Moreover，we could also include notes payable（ normally bank debt） and long-term debt in the numerator and EBITDA in the dominator as a long-term solvency ratio：

Interest bearing debt/EBITDA

Values below 1 on this ratio are considered very strong and values above 5 are considered weak.

2.1.3 Asset Management or Turnover Measures（資產管理和周轉指標）

1.Inventory Turnover（存貨周轉率）

Inventory turnover measures how many times the firms sell off their entire inventory in one year.As long as they don.t run out of stock and thereby forgo sales，the higher the ratio is，the more efficient the inventory management is.

After we know how many times we turn our inventory over during one year，we can figure out how long it took us to turn it over on average：

Day's sales in inventory roughly show how many days inventory sits on before it is sold.

2.Receivables Turnover（應收賬款周轉率）

Similarly，receivables turnover measures the average times the firms collect their credit accounts and lent the money again in one year，reflecting how fast they could collect the sales account.

And the days'sales in receivable are defined below：

Day's sales in receivables roughly show how many days a firm needs to collect on its credit sales.This ratio is also called the average collection period（ACP）.

3.Total Asset Turnover（總資產周轉率）

The total asset turnover ratio measures the number of times a company's total assets are turned over in a year.Generally speaking，it reflects how much one unit of asset contribute to the firm.Besides asset management，it's also an important ratio to describe the profitability of one firm.Normally，the total asset turnover is expected to be 80%.Commonly，the ratio is less than 1，especially if a firm has a large number of fixed assets.

2.1.4 Profitability Measures（盈利性指標）

Profitability measures reflect how efficiently the firm uses its assets and how efficiently the firm manages its operations.

1.Profit Margin（銷售利潤率）

The profit margin is the ratio of net income to sales.It measures how much net income each unit of sales can generate.

2.EBITDA Margin（EBITDA利潤率）

The EBITDA margin is another commonly used measure of profitability.Because EBITDA adds noncash expenses back，EBITDA margin directly focuses on operating cash flows rather than net income，regardless of capital structure or taxes.

Normally，we expect a higher EBITDA margin，which corresponds to a low expense ratio relative to sales.However，it also varies a great deal across industries.Grocery stores have a notoriously low-profit margin of around 2%，but that for the pharmaceutical industry is about 15%.

3.Return on Assets（資產收益率）

Return on assets（ROA） is a measure of profit per unit of asset contribute to the firm.ROA is usually measured as：

4.Return on Equity（權益收益率）

Return on assets（ROE） is a measure of how profit per unit of equity contribute to the firm.Because one firm's final goal is maximizing the benefits of stockholders，ROE is the most important measure of performance for investors.ROE is usually measured as：

5.The DuPont Identity（杜邦分析法）

Notice that we can separate ROE into two other ratios，ROA and the equity multiplier：

Then，we can further decompose ROE by multiplying the top and bottom by total sales：

ROE=Profit margin×Total asset turnover ×Equity multiplier

The last expression of the preceding equation is called the DuPont identity.it's obvious that the ROE is affected by three factors：① Operating efficiency（measured by profit margin）；②Asset-using efficiency（measured by total asset turnover）；③Financial leverage（measured by the equity multiplier）.

【Example 2-1】

Pop Co.has a debt-equity ratio of 0.7.Return on assets is 8.4 percent，and the total equity is ＄840.000.What is the equity multiplier？ Return on equity？Net income？

Answer：

So，Net income=ROE×Total Equity=0.1428×840.000=＄119.952

2.1.5 Market Value Measures（市場指標）

The group of ratios is not based on the financial statement，but the market information.

1.Earnings Per Sharing Ratio（每股收益）

EPS is the ratio of net income to shares outstanding.

2.Price-Earnings Ratio（市盈率）

Price-earnings ratio，or PE ratio，is defined as the ratio of price per share to EPS.PE ratio measures how much the investors are willing to pay per share of one firm.The higher PE ratio commonly implies that the investors expect the firm a promising future.

3.Market-to-Book Ratio（市值面值比）

Market-to-book ratio is the ratio of market value per share to book value per share.

Book value per share is an accounting number that reflects historical costs.The market-to-book ratio compares the market value of the firm's investments to its cost，so a value less than 1 could mean that the firm fails to create value for the investors.

4.Market Capitalization（股票市值）

Market capitalization is a commonly used ratio for potential investors to one firm，equal to the firm's stock market price per share multiplied by the number of shares outstanding.

Market capitalization=Price per share×Share outstanding

5.Enterprise Value（企業價值）

Enterprise Value measures the market value of outstanding shares of stock of one firm plus the market value of outstanding interest-bearing debt less cash on hand.The ratio could closely estimate how much one investor should spend on buying all outstanding stock of the firm and also paying off the debt.The cash deducted is immediately used to pay the debt or dividend off.

EV=Market capitalization+Market value of interest bearing debt-Cash

6.Enterprise Value Multiples（企業價值乘數）

Enterprise Value Multiplies are used to estimate the value of the firm's total business.Notice that even when there are differences in capital structure or interest expense between two companies，we could still use the ratio to compare them.

Similar to PE ratios，a firm with high growth opportunities means the investors expect it with a promising future.

案例分析2-1 《康美藥業財務造假》

一、案例背景

康美藥業是曾經的千億市值白馬股，但自2018年以來屢遭市場質疑，證監會經過5個月的調查，證實了康美藥業財務造假。2019年4月29日晚間，康美藥業公告表示，公司從2018年12月28日被證監會立案調查后，對此進行了自查，發現2018年之前的營業收入、營業成本、費用及款項收付方面存在賬實不符的情況。其中，康美藥業對2017年財務報表進行重述，貨幣資金多計299.44億元，營業收入多計88.98億元，銷售費用少計4.97億元，財務費用少計2.28億元等。

二、康美藥業財務造假跡象

（1）存貸雙高。康美藥業在有巨額存款的情況下還存在巨額負債，背負負債的同時還承擔著高額的財務費用，這本身就不合理，而其閑置存款不購買理財產品也不進行資金管理，利息收入非常低，這一行為違背一般管理者的商業邏輯。由此可以看出其存款可能存在虛構情況。

（2）凈經營現金流每年都低于凈利潤。這可能存在兩種情況：一是企業近年來的實際收入和利潤都是虛高的；二是應收賬款存在壞賬。兩種情況均證明康美藥業存在虛增利潤的現象。

（3）應收賬款和存貨均高于同行業。存貨余額共180億元，金額較大，其中還有人參等難以判斷存在性的存貨。證明其虛構的利潤可能放入了存貨中。與此同時，消耗性生物資產在市場價格下降的時候不計提跌價準備，在關聯方資金往來中其他應收款余額中壞賬準備為0元。

（4）康美藥業主業為醫藥貿易，毛利率達到30%，遠高于行業平均水平。橫向對比說明了康美藥業的凈利潤有虛高之嫌。

（5）賬面現金數377億元，基本與有息負債數400億元相同。有息負債融資的資金基本沒有用于生產經營，因此，融資現金就無法轉化成其他科目，極大可能是被大股東體外占用了，體外占用無法在報表中體現。因此，報表中一直顯示有377億元現金，但是依然需要不斷增加有息負債。

（6）2017年利息收入2.69億元，年利息率大約0.7%。利息收入過低也可以作為資金被體外占用的證據。

（7）股東股權質押比例非常高。截至目前，大股東康美實業持有的康美藥業91.91%的股權已經質押，表明有莊股的嫌疑。

資料來源：王秀珍.康美藥業財務造假案例分析［J］.經濟師，2020（2）：98，100.