Financial Analysis and Eva

Topics: Generally Accepted Accounting Principles, Balance sheet, Financial ratios Pages: 25 (2912 words) Published: January 10, 2013
Financial Reporting & Analysis
Financial Analysis and EVA Xin Chen Associate Professor Dept of Accounting Antai College of Economics and Management


Xin Chen, 陈欣

Who am I?

2009 Visiting Associate Professor, Aarhus School of Business, Denmark 2007 Visting Faculty Fellow, Massachusetts Institute of Technology, USA 2006 Associate Professor, Dept of Accounting, Antai College of Economics and Management, Shanghai Jiaotong University, Shanghai, China 2005 Assistant Professor, Business School, Renmin University, Beijing, China 2005 Ph.D. in Finance, Carlson School of Management, University of Minnesota, USA 1996 Bachelor’s in Economics, Huazhong University of Science and Technology, Wuhan, China


What do I do?
Teaching: Undergraduate: Corporate Finance; Managerial Accounting Master: Auditing Research, International Financial Management MBA: Corporate Finance MPACC: Strategic Corporate Finance CLGO: Financial and Managerial Accounting PhD: Empirical Finance IMBA: Corporate Finance 3

What do I do?
Research Areas: Corporate Finance, Banking, Payout Policy, Financial Market, Auditing, Collectibles Investment Recent Papers: Vertical Interlocks of Executives and Firm Performance of Affiliated SOEs, Working Paper Stamp Characteristics and Long-Term Return After Issuance-- Evidence from New China Stamps, 2012, China Finance Review International, Vol. 2 Iss: 4, pp.351 - 376 4

Articles in Financial Media
证券市场周刊 2011年第20期42-45页,鞍钢集团“胜利大逃亡” 证券市场周刊 2011年第38期48-49页,从招股书复原海普瑞纸上富贵 证券市场周刊 2011年第41期56-57页,56元收购价是“红线”—双汇调节盈 余托股价 证券市场周刊 2012年第8期48-50页,为什么航空公司爱租飞机? 证券市场周刊 2012年第11期49-51页,不如买雅虎 证券市场周刊 2012年第17期46-48页,比亚迪:业绩精确“点刹” 证券市场周刊 2012年第20期40-42页,包钢稀土库存计价方法埋隐忧 证券市场周刊 2012年第21期44-45页,爱施德将激励计划进行到底 证券市场周刊 2012年第22期56-58页,晶盛机电:产销率过低藏隐忧 证券市场周刊 2012年第24期52-54页,中国远洋的财务救赎 证券市场周刊 2012年第26期42-43页,华锐风电资金断流之虞 证券市场周刊 2012年第38期59-61页,鑫苑置业的估值之殇 证券市场周刊 2012年第44期48-50页,投资搜狐还是畅游 钱经 2012年5月刊86页,什么样的邮票更赚钱? 钱经 2012年6月刊108-109页,这样的金银币更值钱 钱经 2012年12月刊86-87页,邮票的投资风险有多大

Useful information to analyze financial reports
Macro economics and business cycle Industry and competition Business model Accounting rules Institutional environment Managerial incentives

M2 Mystery of China
China—the world’s biggest financial empire --By the end of Nov 2012, M2 of China was about 94 trillion RMB (6.3RMB=1USD, 8.1RMB=1EURO). It’s growth rate was about 14%.

U.S. “Quantitative Easing” plan only created M2 of 10.3 trillion USD, equivalent to 65 trillion RMB. M2/GDP for China=1.9; M2/GDP for US=0.69

Why do Chinese people need to issue so much money?
Foreign exchange reserve balance 3.2 trillion USD. The majority of lending is through bank loans. Government allows banks to lend huge amount of money to SOEs to fund infrastructure and other investments. Lack of depth in financial markets.

Other Monetary Policies
Suppressed benchmark interest rates --wide interest spread

Controlled exchange rates --low value added exports by providing cheap labor and lands.

Consequences of Distorting Monetary Policies
Inflated asset prices—properties, collectables, agricultural products Inefficient investments by government—bad loans for banks Lack of funds for private sectors– high interest rates in private lending or shadow banks China is subsidizing the world, while keeping pollutions for ourselves.

China’s Property Bubble
China’s real estate asset bubble is unprecedented in history, having reached a scale five times the size of the U.S. property bubble at its peak. China presently has an estimated 65 million vacant residential units with an additional 36 million units planned (A study based on electricity non-usage over a consecutive 30-day period, conducted by the Chinese Academy of Social Sciences). The commercial sector is 20% vacant in every major urbanized area and construction in progress will increase available space by more than a third.

Exchange-Listed Chinese Company Frauds
Since 2007,...
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