畢業(yè)論文外文翻譯--真實(shí)修改的杜邦分析五種方式改善股東權(quán)益回報(bào)率

1、外文資料 外文資料FIVE WAYS TO IMPROVE RETURN ON EQUITY The Du Pont Model: A Brief History The use of financial ratios by financial analysts, lenders, academic researchers, and small business owners has been widely acknowleged in

2、 the literature. (See, for example, Osteryoung & Constand (1992), Devine & Seaton (1995), or Burson (1998) The concepts of Return on Assets (ROA hereafter) and Return on Equity (ROEhereafter) are important f

3、or understanding the profitability of a business enterprise. Specifically, a “return on” ratio illustrates the relationship between profits and the investment needed to generate those profits. However, these concepts

4、 are often “too far removed from normal activities” to be easily understood and useful to many managers or small business owners. (Slater and Olson, 1996) In 1918, four years after he was hired by the Du Pont Corporatio

5、n to work in its treasury department, electrical engineer F. Donaldson Brown was given the task of untangling the finances of a company of which Du Pont had just purchased 23 percent of its stock. (This company was Ge

6、neral Motors!) Brown recognized a mathematical relationship that existed between two commonly computed ratios, namely net profit margin (obviously a profitability measure) and total asset turnover (an efficiency measur

7、e), and ROA. The product of the net profit margin and total asset turnover equals ROA, and this was the original Du Pont model, as illustrated in Equation 1 below. Eq. 1: (net income / sales) x (sales / total assets)

8、= (net income / total assets) i.e. ROA At this point in time maximizing ROA was a common corporate goal and the realization that ROA was impacted by both profitability and efficiency led to the development of a system of

9、 planning and control for all operating decisions within a firm. This became the dominant form of financial analysis until the 1970s. (Blumenthal, 1998)In the 1970s the generally accepted goal of financial management

10、 became “maximizing the wealth of the firm’s owners” (Gitman, 1998) and focus shifted from ROA to ROE. This led to the first major modification of the original Du Pontmodel. In addition to profitability and efficienc

11、y, the way in which a firm financed its activities, i.e. its use of “l(fā)everage” became a third area of attention for financial managers. The new ratio of interest was called the equity multiplier, which is (total asset

12、s / equity). The modified Du Pont model is shown in Equations 1 and 2 below. Eq. 2: ROA x (total assets / equity) = ROE Eq. 3: (net income / sales) x (sales / total assets) x (total assets / equity) = ROEThe modified

13、 Du Pont model became a standard in all financial management textbooks and a staple of introductory and advanced courses alike as students read statements such as: “Ultimately, the most important, or “bottom line” acco

14、unting ratio is the ratio of net income to common equity (ROE).” (Brigham and Houston, 2001) the “really” modified model. 5. tax effect ratio: (Earnings After Taxes or EAT / EBT) The relationship that ties these five

15、 ratios together is that ROE is equal to their combined product. (See Equation 4.) Example of Applying the “Really” Modified Du Pont Model To illustrate how the model works, consider the income statement and balance sh

16、eet for the fictitious small firm of Herrera & Company, LLC. Income Statement Net Sales …………………………………………………….. $766,990 Cost of Goods Sold ………………………………………….. (560,000) Selling, General, & Administrative Expense

17、s ………………. (143,342) Depreciation Expense ……………………………………….. (24,000) Earnings Before Interest & Taxes …………………………… $ 39,648 Interest Expense ……………………………………………... (12,447) Earnings Before Taxes ………………………………………

18、. $ 27,201 Taxes ………………………………………………………… (8,000) Earnings After Taxes (net profit) ……………………………. $ 19,201 Balance Sheet Cash ……………………….$ 40,000 Notes Payable ………………… $ 58,000 Pre-paid Expenses ………... 12,000

19、 Accounts Payable …………….. 205,000 Accounts Receivable ……… 185,000 Accrued Expenses ……………. 46,000 Inventory ………………….. 200,000 Current Liabilities ……………. $309,000 Current Assets ……………. $437,000 Long-Term DebtLan

20、d/Buildings …………… 160,000 Mortgage ……………………. 104,300 Equipment ………………… 89,000 8-Year Note ………………… 63,000 Less: Acc. Depreciation …... (24,000) Owner’s Equity ……………….. 185,700 Net Fixed As

21、sets ………….. $225,000 Total Liabilities & Equity …….. $662,000 Total Assets ………………. $662,000 Computation of ROE 1. Operating Profit Margin = $39,648 / $766,990 = .0517 2. Capital Turnover = $766,990 / $411,000* =

22、 1.8662 3. Financial Cost Ratio = $27,201 / $39,648 = .6861 4. Financial Structure Ratio = $411,000 / $185,700 = 2.2132 5. Tax Effect Ratio = $19,201 / $27,201 = .7059 ROE = .0517 x 1.8662 x .6861 x 2.2132 x .7059 = .