Instructions
FinSAS Version 20111028
FinSAS: Financial Statement Analysis Spreadsheet
by
Dr. Donald V. Saftner
[email protected]
To Accompany
Financial Reporting and Analysis:
Using Financial Accounting Information
13/e
by Dr. Charles Gibson
Copyright © 2013 Cengage Learning
All rights reserved
FinSAS: Financial Statement Analysis Spreadsheet allows users to input the reported data from the financial statements, notes, and other sources. FinSAS then computes the ratios found in Financial Reporting and Analysis: Using Financial Accounting Information 13/e. Using this tool, you can spend more time analyzing the statements and less time crunching the numbers. In addition to the ratios, both a vertical and horizontal analysis are performed.
Instructions:
Note the sheet tabs below. The following instructions use the names of those tabs as section headings. Click on a tab to see that sheet after reading the instructions below.
Input
On the Input sheet, enter values into all appropriate cells (i.e., those with blue font). The figures in black font are calculated based on your input. By entering the Company Name, Analyst Name(s), and Most Recent Year Available in the first three input cells, those items will appear on all subsequent output sheets. They make it easy to identify any printouts you make.
The next two input cells (Years Available for Income Statement and Balance Sheet) are particularly important to the functioning of the model. Changing these numbers (while keeping them within the range one through five) changes the number of columns of data that are available on the Input sheet and all subsequent output sheets. In a single annual report/10K, there are often three years of income statements and two years of balance sheets. The annual report/10K you are using may have more and/or you may want to use multiple years’ worth of annual report/10Ks to increase the amount of data available to analyze. The maximum years that FinSAS can accept is five years.
Fill in all remaining input cells for which you can find data. There are many different names for the same account. You must translate the terminology used by the company to the generic terms used in FinSAS. When the detail is not needed, FinSAS requests a summary figure. For instance, on the published income statement there may be several operating expenses (e.g., wages, utilities, rent), but FinSAS only needs the sum of those, which would be entered as Operating Expenses. Be sure to read the footnotes to the financial statements and the comparative data section. Those sources include some of the information you need to complete the Input sheet. Also be sure to match key subtotals (e.g. the FinSAS total current asset should be same as the figure on the balance sheet even though the detail lines may be different.)
Be consistent in ignoring a certain number of decimal places. Many financial statements have "in thousands, except par values," "millions except share and per share amounts," or similar statements. When entering data into FinSAS, it is usually best to follow the same convention as the financial statements in choosing the number of decimal places to assume have been removed. An exception is the second statement above. Only "per share" data should be entered as dollars with no decimal places removed. Account balances and total share information should consistently have the same number of decimal places removed. If the share and account balances have a different number of decimal places removed then ratios such as "book value per share" and "operating cash flow per share" will be inaccurate.
Source of Input
This is the place to document where you found the information you entered on the previous sheet. This can be very useful for you and for anyone who reviews your work. For instance if most of it came from the company's annual report/10K, then state that at the top. Individual lines of input in FinSAS might be the sum of a few lines in the published financial statements. Indicate on this sheet how you determined the FinSAS inputs from the statements. For some of the inputs, you may have used information from the footnotes or comparative information section. Indicate that information on this sheet and include page numbers wherever possible. Of course, other sources of information should be cited.
Vertical Analysis
After you insert your data, you can see the result of the vertical analysis. It compares each amount on the income statement and balance sheet with a base amount (net sales on the income statement and total assets on the balance sheet) selected from the same year.
Horizontal Analysis
After you insert your data, you can see the result of the horizontal analysis. It compares each amount on the income statement and balance sheet with the same amount for the oldest year available.
Ratios – avg.
After you insert your data, you can see the result of the ratio analysis. For the ‘Ratio – Average’, the average of beginning of year values and end of year values is used when appropriate. Note that if you only have two years of balance sheet information, then for those ratios that use the average of two years of balance sheet information, only one year's worth of ratios can be calculated. Since it is desirable to compare the ratios across time to determine possible trends, a solution to only having one year's worth of ratios should be sought. Some possible solutions are to find additional years' worth of data and/or use the Ratio - end. sheet.
Ratios with a negative cash flow or negative profit measure in the numerator will display #N/A, which means not available or not applicable. This makes it less likely that invalid conclusions will be made during your analysis.
You may want to determine how a certain ratio is calculated. You may do this in one of two ways. If you select the cell in which the ratio appears, then the formula for that cell appears near the top of the screen. You will then have to determine what accounts the cell refers to by looking at the Input screen. Alternatively, you can refer to the Documentation screen for the definition.
Ratios – end.
For the ‘Ratio – End’, the end of year values are used instead of the average values. The ‘*’ marks indicate the ratios for which the end of year values are used whereas the averages are used on the previous sheet.
For the Ratios - end. sheet, the end of year values are used instead of the average values. The ‘*’ marks indicate the ratios for which the end of year values are used whereas the averages are used on the previous sheet. Note that the Ratios - avg. sheet is theoretically superior in that averages for balance sheet information (point in time) is compared to income statement or cash flow statements (period of time).
Documentation
The Documentation sheet provides you the definitions of the ratios using the row labels of the Input sheet or other ratio results.
&CCopyright © 2013 Cengage Learning
[email protected]Input
1 2 3 4 5
FinSAS Version 20111028 Input
Company: Nordstorm Inc.
Analyst: Your name(s) here
Most Recent Year Available: 2011
Years Available for:
Income Statement (1-5) 5
Balance Sheet (1-5) 5
= = = = = =
INCOME STATEMENT 2011 2010 2009 2008 2007
- - - - - -
Net Sales 10497 9310 8258 8272 8828
Less: Cost of Goods Sold 6592 5897 5328 5417 5526
- - - - -
Gross Profit 3905 3413 2930 2855 3302
Other Operating Revenue 380 390 369 301 252
Less: Operating Expenses 3036 2685 2465 2377 2359
- - - - -
Operating Income 1249 1118 834 779 1195
Less: Interest Expense 130 127 138 131 74
(no capitalized interest)
Other Income (Expenses) 0 0 0 0 0
Unusual or Infreq. Item;
Gain (Loss) 0 0 0 0 52
Equity in Earnings of Assoc.;
Profit (Loss) 0 0 0 0 0
- - - - -
Income before Taxes 1119 991 696 648 1173
Less:Taxes Related to Operations 436 378 255 247 458
- - - - -
N.I. before Noncontr. Inc 683 613 441 401 715
Noncontrolling income (loss) 0 0 0 0 0
- - - - -
N.I. before Nonrecurring Items 683 613 441 401 715
Oper. of Discontinued Segment;
Income (Loss) 0 0 0 0 0
Disposal of Discont. Segment;
Gain (Loss) 0 0 0 0 0
Extraordinary Item;
Gain (Loss) 0 0 0 0 0
Cum. Effect of Acct Change;
Gain (Loss) 0 0 0 0 0
- - - - -
Net Income (Loss) 683 613 441 401 715
= = = = = =
BALANCE SHEET 2011 2010 2009 2008 2007
- - - - - -
ASSETS
Current Assets:
Cash 1877 1506 795 72 358
Marketable Securities 0 0 0 0 0
Gross Receivables 2033 2026 2035 1942 1788
Less: Allowance for Bad Debts 0 0 0 0 0
Net Trade Receivables 2033 2026 2035 1942 1788
Inventories 1148 977 898 900 956
Prepaid Expenses 282 79 88 93 181
Other Current Assets 220 236 238 210 78
- - - - -
Total Current Assets 5560 4824 4054 3217 3361
Long-Term Assets:
Net Tangible (Fixed) Assets (other than construction in progress) 2469 2318 2242 2221 1983
Construction in Progress 0 0 0 0 0
Intangible Assets 175 53 53 53 53
Investments 0 0 0 0 0
Other Nonoperating Assets 0 0 0 0 0
Other Operating Assets 287 267 230 170 203
- - - - -
Total Long-Term Assets 2931 2638 2525 2444 2239
Total Assets 8491 7462 6579 5661 5600
LIABILITIES AND EQUITY
Current Liabilities:
Accounts Payable 917 846 726 563 556
Short Term Loans 0 0 0 275 0
Current Maturity of L.t. Debt 506 6 356 24 261
Other Current Liabilities 1152 1027 932 739 818
- - - - -
Total Current Liabilities 2575 1879 2014 1601 1635
Long-Term Liabilities:
Long-term Debt 3141 2775 2257 2214 2236
Reserves 0 0 0 0 0
Deferred Liabilities 500 495 469 435 369
Noncontrolling Interest 0 0 0 0 0
Redeemable Preferred 0 0 0 0 0
Other Long-term Liabilities 319 292 267 201 245
- - - - -
Total Long-term Liabilities 3960 3562 2993 2850 2850
Total Liabilities 6535 5441 5007 4451 4485
Shareholders' Equity:
Preferred Equity 0 0 0 0 0
Common Equity-incl. Ret. Ern. 1956 2021 1572 1210 1115
- - - - -
Total Equity 1956 2021 1572 1210 1115
Total Liabilities and Equity 8491 7462 6579 5661 5600
= = = = = =
OTHER DATA 2011 2010 2009 2008 2007
- - - - - -
Capitalized Interest 7.0 5.0 7.0 11.0 12.0
Interest Portion of Rentals 0.0 0.0 0.0 0.0 0.0
Liquidation Value of Pref. Stock 0.0 0.0 0.0 0.0 0.0
Dividends on Redeemable Pref. 0.0 0.0 0.0 0.0 0.0
Dividends on Nonredeemable Pref. 0.0 0.0 0.0 0.0 0.0
Dividends per Common Share 0.920 0.760 0.640 0.640 0.640
Total Cash Dividends 197.0 167.0 139.0 138.0 134.0
Dil. Earn. per Sh. before Nonrec. Items 3.140 2.750 2.010 1.830 2.880
Market Price per Common Share 48.190 41.270 34.840 12.690 39.740
Tax Rate (0-1) 39.000 38.200 36.600 38.100 39.000
Common Shares...