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Case Analysis

This document contains financial statements and ratio analyses for AsiaInfo for 1997 and 1998. Key information includes: - Sales increased from $37 million in 1997 to $44 million in 1998. However, net income decreased from a loss of $382,000 to a profit of $1.5 million over the same period. - Total assets increased from $45 million in 1997 to $71 million in 1998. Current assets increased significantly from $43 million to $65 million. - Many financial ratios could not be calculated due to missing or undefined values in the data provided. Available ratios indicate moderate sales volatility but very low volatility in operating income and earnings.

Uploaded by

Liza Nabi
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
288 views

Case Analysis

This document contains financial statements and ratio analyses for AsiaInfo for 1997 and 1998. Key information includes: - Sales increased from $37 million in 1997 to $44 million in 1998. However, net income decreased from a loss of $382,000 to a profit of $1.5 million over the same period. - Total assets increased from $45 million in 1997 to $71 million in 1998. Current assets increased significantly from $43 million to $65 million. - Many financial ratios could not be calculated due to missing or undefined values in the data provided. Available ratios indicate moderate sales volatility but very low volatility in operating income and earnings.

Uploaded by

Liza Nabi
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 29

Company

First Calendar Year of Data

AsiaInfo
1997

Information Metric
Income Statement

1997

1998

37,283,435
29,555,878
7,727,557

44,222,392
32,189,514
12,032,878

7,002,261
393,468

8,871,485
1,435,487

1,045,333

1,045,333

Operating Profit

-713,505

680,573

Non-Operating Items
Other Non-operating Income (Expense)
Interest Income
Earnings Before Interest and Taxes (EBIT)

43,043
173,601
-496,861

113,532
758,533
1,552,638

Earnings Before Taxes (EBT)

184,998
-681,859

394,398
1,158,240

Income Before Extraordinary Items

267,000
-948,859

-255,504
1,413,744

Net Income

566,840
-382,019

122,066
1,535,810

Preferred Dividends
Net Income available to Common Equityholders

-382,019

1,535,810

Sales
Cost of Goods Sold
Gross Profit
Operating Expenses
S, G & A Expenses
R & D Expenses
Lease Expenses
Depreciation and Amortization
Other Operating Expenses

Interest Expense

Income Taxes

Income from Extraordinary Items

Balance Sheet
Assets
Current Assets
Inventories
Accounts Receivable
Advance, Deposits, and Prepayments
Marketable Securities
Cash and Equivalents
Other Current Assets

566383
25,423,601
1049246
15,749,374
16,266

Total Current Assets

Fixed Assets (PPE)


Gross Fixed Assets
Accumulated Depreciation

42,804,870

1,745,354
Net Fixed Assets

Gross Intangible Assets


Accumulated Amortization

1,745,354
421,417

Net Intangible Assets

421,417

Other Non-Current Assets

387,238
808,655

Total Assets

45,358,879

Preliminary Expenses
Investments
Others

Liabilities and Stockholders' Equity


Current Liabilities
Accounts Payable
Notes Payable
Short-term Loan
Accrued Expenses
Taxes Payable
Provision for Taxes
Proposed Dividend
Current Portion of Long-Term Loan
Other Current Liabilities
Total Current Liabilities

6,377,594
26,112,198

Long-Term Liabilities
Term Loan
Capital Leases
Deferred Taxes
Other Long-term Liabilities
Total Long-Term Liabilities

Preferred Stockholders' Equity


Preferred Stock and Others

163,209

163,209

Total Non-Current Liabilities


Commons Stockholders' Equity
Share Capital
Share Premium
Reserve and Surplus
Retained Earnings

10,117,535
5,677,130
1,604,277
2,335,662

17,667,474

2,180,828

Share Money Deposit


Directors' Loan
Others
Total Common Stockholders' Equity

-764,830
19,083,472

Total Liabilities and Stockholders' Equity

45,358,879

Difference

0.00

0.00

Indicators and Adjustments


Number of Common Shares
MV/BV
Year-end Stock Price

#DIV/0!

#DIV/0!

Market Value of Equity


Market Value of Debt
Market Value of Preferred Stock

#DIV/0!

#DIV/0!

Enterprise Value

#DIV/0!

#DIV/0!

Common Stockholders' Equity


Adjusted Common Stockholders' Equity

0
0

19,083,472
19,083,472

NWC
NWC
Adjusted NWC
Adjusted NWC

16,692,672
16,692,672
6,620,428
6,620,428

Long-Term Debt
Short-Term Interest Bearing Debt
Current Portion of Long-Term Debt
Total Debt/Borrowed Fund

0
0
0
0

0
5,677,130
0
5,677,130

101,237

116,429

Capital Expenditure
Average Daily Expenditure

Ratio Analysis
Activity Ratios
Receivables Turnover (Times)
Inventory Turnover (Times)
Accounts Payable Turnover (Times)
Days Sales Outstanding
Days of Inventory on Hand

#DIV/0!
56.83
5.69
#DIV/0!
6

Operating Cycle
Payment Deferral Period
Cash Conversion Cycle
Working Capital Turnover
Fixed Assets Turnover
Total Assets Turnover
Liquidity Ratios
Current Ratio
Quick Ratio
Cash Ratio
Defensive Interval Ratio (Days)

#DIV/0!
64
#DIV/0!
5.30
50.67
1.95

1.64
#REF!
#REF!
#REF!

Solvency (Debt) Ratios


Debt-to-assets Ratio
Debt-to-capital Ratio
Debt-to-equity Ratio
Financial Leverage

0.13
0.23
0.30
2.38

Solvency (Coverage) Ratios


Interest Coverage Ratio
Debt Service Coverage Ratio

3.94
3.94

Profitability Ratios (Return on Sales)


Gross Profit Margin
EBITDA Margin
Operating Profit Margin
Pre-tax Margin
Net Profit Margin
Profitability Ratios (Return on Investments)
Operating ROA
ROA
ROFA
ROIntA
ROE
ROComE
ROIC
Multiples
EV/EBITDA
Price/Earnings
EV/Sales
Price/Sales
Price/EV
Price/BVPS
Widely Monitored Ratios
Current Ratio

27.2%
5.9%
3.5%
2.6%
3.5%

6.8%
6.8%
176.0%
728.9%
16.1%
16.1%
12.5%

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

1.64

Quick Ratio
Inventory Turnover
Average Collection Period
Fixed Asset Turnover
Total Asset Turnover
Debt Ratio
Debt-to-Equity
Times Interest Earned
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Total Assets (ROA)
Return on Equity (ROE)
EPS
P/E
EV/EBITDA

#REF!
56.83
#DIV/0!
50.67
1.95
0.13
0.30
3.94
27.2%
3.5%
3.5%
6.8%
16.1%
#DIV/0!
#DIV/0!
#DIV/0!

DuPont Sensitivity Analysis


ROE Decomposition (7-Factor)
Base Case
Return on Equity (ROE)
Financial Leverage
Return on Assets (ROA)
Total Assets Turnover
Net Profit Margin
Tax Burden
Interest Burden
Operating Profit Margin
Effect of Non-operating Items
Effect of Operating Items
Gross Profit Margin

16.10%
2.38
6.8%
1.95
3.5%
1.33
0.75
0.02
2.28
0.06
0.27

Sensitivity to Profit Margin


Net Profit Margin
Total Assets Turnover
Return on Assets (ROA)
Financial Leverage
Return on Equity (ROE)
% Return on Equity (ROE)

3.5%
1.95
6.8%
2.38
16.1%
Mean
Dispersion

Sensitivity to Asset Turnover


Net Profit Margin
Total Assets Turnover

#REF!
#REF!

3.5%
1.95

Return on Assets (ROA)


Financial Leverage
Return on Equity (ROE)
% Return on Equity (ROE)

6.8%
2.38
16.1%
Mean
Dispersion

Sensitivity to Financial Leverage


Net Profit Margin
Total Assets Turnover
Return on Assets (ROA)
Financial Leverage
Return on Equity (ROE)
% Return on Equity (ROE)

#REF!
#REF!

3.5%
1.95
6.8%
2.38
16.1%
Mean
Dispersion

#REF!
#REF!

Most Sensitive Factor of ROE

#REF!

Risk Analysis
Sales, Operating Profit and Earnings Volatility
Standard Deviation of Sales
Mean of Sales
Coefficient of Variation of Sales
Level of Sales Volatility

11795643.93
47261880.00
25.0%
Moderate

Standard Deviation of Operating Income


Mean of Operating Income
Coefficient of Variation of Operating Income
Level of Operating Income Volatility

2940104.03
-1665541.33
-176.5%
Very Low

Standard Deviation of Earnings


Mean of Earnings
Coefficient of Variation of Earnings
Level of Earnings Volatility

3329535.17
-1263963.67
-263.4%
Very Low

Leverage
% Sales
% EBIT
% Net Income
Degree of Operating Leverage (DOL)
Degree of Financial Leverage (DFL)
Degree of Total Leverage (DTL)
Average DOL

19%
-412%
-502%
-22.16
1.22
-26.97
#REF!

Average DFL
Average DTL

#REF!
#REF!

Altman Z-Score Model


Company Type
Publicly Traded Manufacturer
Current Assets/Total Assets
Retained Earnings/Total Assets
EBIT/Total Assets
Market Value of Equity/Book Value of Debt
Sales/Total Assets
Z-Score
Zone
% Gap between Z-Score and Distress Zone
Probability of Default (5% P 90%)
DISTRESS ZONE Z<
GREY ZONE Z<
Strategic Indicators

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
1.81
2.99

0.94
0.05
0.03
#DIV/0!
0.97
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
1.81
2.99

1999

1997
1998
1999
1998
1999
Common-Size Income Statement Growth Rate

60,279,813
41,962,584
18,317,229

100.0%
79.3%
20.7%

100.0%
72.8%
27.2%

100.0%
69.6%
30.4%

18.6%
8.9%
55.7%

36.3%
30.4%
52.2%

16,935,055
2,838,188

20.1%
3.2%
0.0%
2.4%
0.0%
1.5%

28.1%
4.7%
0.0%
5.8%
0.0%
-8.2%

26.7%
264.8%

90.9%
97.7%

0.0%

235.6%

-4,963,692

18.8%
1.1%
0.0%
2.8%
0.0%
-1.9%

-195.4%

-829.3%

142,504
827,157
-3,994,031

0.1%
0.5%
-1.3%

0.3%
1.7%
3.5%

0.2%
1.4%
-6.6%

163.8%
336.9%
-412.5%

25.5%
9.0%
-357.2%

617,867
-4,611,898

0.5%
-1.8%

0.9%
2.6%

1.0%
-7.7%

113.2%
-269.9%

56.7%
-498.2%

383,226
-4,995,124

0.7%
-2.5%

-0.6%
3.2%

0.6%
-8.3%

-195.7%
-249.0%

-250.0%
-453.3%

49,442
-4,945,682

1.5%
-1.0%

0.3%
3.5%

0.1%
-8.2%

-78.5%
-502.0%

-59.5%
-422.0%

-4,945,682

0.0%
-1.0%

0.0%
3.5%

0.0%
-8.2%

-502.0%

-422.0%

3,507,678

Common-Size Balance Sheet

2908426
23,274,920
568825
37,593,678
426,724

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

56.0%
#REF!
2.3%
0.0%
#REF!
0.0%

#REF!
#REF!
#REF!
#REF!
#REF!
#REF!

Growth Rate

#REF!
#REF!
#REF!
#REF!
#REF!
#REF!

64,772,573

#DIV/0!

94.4%

#REF!

2,183,545

#DIV/0!
#DIV/0!
#DIV/0!

3.8%
0.0%
3.8%

#REF!
#REF!
#REF!

168,228
4,470,861

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

0.9%
0.0%
0.9%
0.0%
0.0%
0.9%
1.8%

#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!

71,426,979

#DIV/0!

100.0%

#REF!

11,867,188

5,667,088
31,638,808

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

22.3%
0.0%
12.5%
3.5%
0.0%
5.1%
0.0%
0.0%
14.1%
57.6%

#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!
#REF!

0.0%

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

0.0%
0.0%
0.0%
0.0%
0.0%

#REF!
#REF!
#REF!
#REF!
#REF!

0.0%

303,234

#DIV/0!

0.4%

#REF!

0.0%

#REF!

303,234

#DIV/0!

0.4%

#REF!

0.0%

#REF!

46,118,424

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

39.0%
0.0%
0.0%
4.8%

#REF!
#REF!
#REF!
#REF!

2,183,545
4,302,633
4,302,633

9,698,882
1,930,145
2,475,505

-2,764,854

0.0%

#REF!

#REF!
0.0%

#REF!
#REF!

0.0%

#REF!

0.0%

#REF!
#REF!

0.0%

#REF!

#REF!
#REF!
#REF!
#REF!

#REF!
#REF!

0.0%

#REF!

#REF!

-3,868,633
39,484,937

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

0.0%
0.0%
-1.7%
42.1%

#REF!
#REF!
#REF!
#REF!

0.0%

#REF!
#REF!

71,426,979

#DIV/0!

100.0%

#REF!

0.0%

#REF!

0.00

#DIV/0!
#DIV/0!

#DIV/0!
39,484,937
39,484,937
33,133,765
#REF!
5,238,969
-1,381,459
0
9,698,882
0
9,698,882

169,139

#REF!
1.80
#REF!
#REF!
202

#REF!
#REF!
#REF!
1.82
27.61
0.84

2.05
#REF!
#REF!
#REF!

0.14
0.20
0.25
1.81

-6.46
-6.46

30.4%
-0.8%
-6.6%
-7.7%
-8.2%

-5.6%
-6.9%
-226.5%
-114.9%
-12.5%
-12.5%
#REF!

#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

2.05

#REF!
1.80
#REF!
27.61
0.84
0.14
0.25
-6.46
30.4%
-6.6%
-8.2%
-6.9%
-12.5%
#DIV/0!
#DIV/0!
#DIV/0!

-12.53%
1.81
-6.9%
0.84
-8.2%
1.07
1.15
-0.08
0.80
-0.27
0.30

-8.2%
1.95
-16.0%
2.38
-38.0%
#REF!

3.5%
0.84

2.9%
2.38
7.0%
#REF!

3.5%
1.95
6.8%
1.81
12.2%
#REF!

#REF!
#REF!
#REF!
#REF!
#REF!
#REF!

0.91
-0.04
-0.06
#DIV/0!
0.84
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
1.81
2.99

Company
Last Year of Actual Data
Sales Growth
Tax Rate
Depreciation as a % of Sales
Capital Expenditures as % of Sales
WCInv as % of Sales
Required Rate of Return
Terminal Growth Rate
Shares Outstanding

Information Metric

Sales
Net Income
Interest Expense
Interest Expense (1 - Tax Rate)
Depreciation
Capital Expenditure
WCInv
FCFF
Interest Expense (1 - Tax Rate)
Net Borrowing
FCFE
Terminal Value
PV of FCFE
Intrinsic Value of Equity (FCF)
Intrinsic Value per Share (FCF)

Net Income
Interest Expense

AsiaInfo
1999
20.0
35.0
2.5
2.0
5.0
14.0
4.0
14.2

1999

2000

2001

2002

2003

60.3
-4.9
0.6
0.4
1.5
1.2
0.9
-5.1
0.4
0.0
-5.5

72.3
2.2
0.7
0.5
1.8
1.4
0.6
2.4
0.5
0.0
1.9

86.8
3.5
0.9
0.6
2.2
1.7
0.7
3.7
0.6
0.0
3.2

104.2
5.2
1.0
0.7
2.6
2.1
0.9
5.5
0.7
0.0
4.9

-4.9
85.8
6.06

1.9

3.2

4.9

125.0
7.5
1.2
0.8
3.1
2.5
1.0
7.9
0.8
0.0
7.1
73.7
80.7

-8.2%
1.0%

3.0%
1.0%

4.0%
1.0%

5.0%
1.0%

6.0%
1.0%

4.5%

Company
Last Year of Actual Data
Required Rate of Return
Terminal Growth Rate
Shares Outstanding

Information Metric

AsiaInfo
1998
14.0
4.0
14.2

1999

2000

2001

2002

2003

39.5
-4.9
0.0
34.5

34.5
2.2
0.0
36.7

36.7
3.5
0.0
40.2

40.2
5.2
0.0
45.4

45.4
7.5
0.0
52.9

Net Income
Equity Charge
Residual Income
Terminal Value
PV of RI

-4.9
5.5
-10.5

2.2
4.8
-2.7

3.5
5.1
-1.7

5.2
5.6
-0.4

-9.2

-2.1

-1.1

-0.2

7.5
6.4
1.1
11.5
6.5

Intrinsic Value of Equity (RI)


Intrinsic Value per Share (RI)

33.4
2.36

NAV/Share

1.36

19.31

5.0%
9.88
0.1
0.988
8.84

10.0%
9.36
0.2
1.872

15.0%
8.84
0.4
3.536

20.0%
8.32
0.2
1.664

25.0%
7.8
0.1
0.78

Beginning Book Value of Equity


Net Income
Dividends
Ending Book Value of Equity

Retention Rate
Justified P/E
Probability

133002357.xlsx.ms_office
Crystal Ball Report - Full
Simulation started on 10/6/2012 at 22:36:06
Simulation stopped on 10/6/2012 at 22:36:08
Run preferences:
Number of trials run
Extreme speed
Monte Carlo
Random seed
Precision control on
Confidence level
Run statistics:
Total running time (sec)
Trials/second (average)
Random numbers per sec
Crystal Ball data:
Assumptions
Correlations
Correlated groups
Decision variables
Forecasts

2,000

95.00%

0.17
11,893
59,465

5
0
0
0
2

Page 19

133002357.xlsx.ms_office
Forecasts

Worksheet: [Case 9 - Group 15.xlsx]FCF


Forecast: Intrinsic Value per Share (FCF)

Cell: C33

Summary:
Certainty level is 95.00%
Certainty range is from 4.76 to 8.67
Entire range is from 4.10 to 12.52
Base case is 6.06
After 2,000 trials, the std. error of the mean is 0.02

Statistics:
Trials
Mean
Median
Mode
Standard Deviation
Variance
Skewness
Kurtosis
Coeff. of Variability
Minimum
Maximum
Range Width
Mean Std. Error

Forecast values
2,000
6.32
6.16
--1.02
1.05
0.9538
4.75
0.1619
4.10
12.52
8.42
0.02

Page 20

133002357.xlsx.ms_office
Forecast: Intrinsic Value per Share (FCF) (cont'd)
Percentiles:
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

Forecast values
4.10
5.16
5.46
5.72
5.93
6.16
6.42
6.72
7.09
7.72
12.52

Page 21

Cell: C33

133002357.xlsx.ms_office
Worksheet: [Case 9 - Group 15.xlsx]RI
Forecast: Intrinsic Value per Share (RI)

Cell: C26

Summary:
Certainty level is 95.00%
Certainty range is from 1.63 to 4.00
Entire range is from 1.30 to 6.89
Base case is 2.36
After 2,000 trials, the std. error of the mean is 0.01

Statistics:
Trials
Mean
Median
Mode
Standard Deviation
Variance
Skewness
Kurtosis
Coeff. of Variability
Minimum
Maximum
Range Width
Mean Std. Error

Forecast values
2,000
2.55
2.45
--0.61
0.38
1.13
5.85
0.2411
1.30
6.89
5.59
0.01

Page 22

133002357.xlsx.ms_office
Forecast: Intrinsic Value per Share (RI) (cont'd)
Percentiles:
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%

Cell: C26

Forecast values
1.30
1.86
2.04
2.19
2.31
2.45
2.60
2.77
3.00
3.35
6.89

End of Forecasts

Page 23

133002357.xlsx.ms_office
Assumptions

Worksheet: [Case 9 - Group 15.xlsx]FCF


Assumption: Required Rate of Return
Normal distribution with parameters:
Mean
Std. Dev.

Cell: C9

14.0
1.4

Assumption: Sales Growth


Normal distribution with parameters:
Mean
Std. Dev.

Cell: C4

20.0
4.0

Selected range is from 15.8 to Infinity

Assumption: Terminal Growth Rate


Normal distribution with parameters:
Mean
Std. Dev.

Cell: C10

4.0
0.5

Selected range is from -Infinity to 4.5

Worksheet: [Case 9 - Group 15.xlsx]RI


Assumption: Required Rate of Return
Normal distribution with parameters:
Mean
Std. Dev.

Cell: C4

14.0
1.4

Page 24

133002357.xlsx.ms_office

Assumption: Terminal Growth Rate


Normal distribution with parameters:
Mean
Std. Dev.

Cell: C5

4.0
0.5

Selected range is from -Infinity to 4.5

End of Assumptions

Page 25

133002357.xlsx.ms_office
Sensitivity Charts

Page 26

133002357.xlsx.ms_office

End of Sensitivity Charts

Page 27

Company
Last Year of Actual Data
Sales Growth
EBIT % of Sales
Tax Rate
Depreciation as a % of sales
Required Rate of Return
Terminal Growth Rate
Shares Outstanding
Shares Repurchased
Repurchase Price

Information Metric
Income Statement
Sales
COGS
Gross Profit
Operating Expense
Operating Profit
Non-operating Income (Expense)
Interest Expense
Existing Structure
Addition
Total Interest Expense
Earnings Before Interest and Taxes

COGS %
Operating Expenses %
Non-operating Income (Expense) %

Intel
1999
25
25
30
5
15
5
208.99
13.3
45

1999

2000

2001

2002

2003

60
42
18
23
-5
1

75
51
24
23
2
1

94
63
31
24
7
1

118
78
40
27
13
1

147
96
52
29
22
1

69.6%
38.6%
1.6%

68.0%
30.0%
1.0%

67.0%
26.0%
1.0%

66.0%
23.0%
1.0%

65.0%
20.0%
1.0%

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