Home > Company > Investor Relations > Financial Information > Financial Analysis Summarized income statement over the past five years      Enlarge View    Note 1: Specified if the statement for specific year is unaudited. Note 2: The equation for calculation shall be stated at the end of this table in the annual report. Note 3: Companies with stocks traded at the TSE or OTC shall include the financial analysis covering the quarter before this report is printed.   1. Financial structure (1)  Liabilities to assets ratio = total liabilities/ total assets. (2)  Long-term capital to fixed assets ratio = (net shareholder’s equity + long-term liabilities)/net fixed assets. 2. Ability to repay debt (1)  Current ratio = current assets/current liabilities (2)  Quick ratio = (current assets- inventory – prepayments)/current liabilities (3)  Debt service coverage ratio=EBIT/interest expense for current period. 3. Utility (1)  Account receivable (including account receivable and note receivable from business) turnover = net sales/average balance of account receivable (including account receivable and note receivable from operation). (2)  Average daily payment=365/account receivable turnover (3)  Inventory turnover= cost of goods sold/average inventory (4)  Account payable (including account payable and note payable from operation) turnover = cost of goods sold/average balance of account payable (including account payable and note payable from operation). (5)  Average daily sales = 365/inventory turnover (6)  Fixed assets turnover = net sales /net fixed assets (7)  Total assets turnover = net sales/total assets. 4. Profitability (1)  Return on Assets = [Earning + interest expenses x (1-tax rate)]/average total assets. (2)  Return on Equity = Earning /average net equity (3)  Net profit rate = Earning/net sales (4)  Earning per share = (Earning – dividend from preferred shares)/weighed average number of outstanding shares (Note 3). 5. Cash Flow (1)  Cash flow ratio = (net sales – variable cost and expenses from operation)/operating income. (2)  Cash flow adequacy ratio = net cash flow from operation over the last five years/(capital spending +addition to inventory + cash dividend) over the last five years. (3)  Cash reinvestment ratio = (net cash flow from operation – cash dividend)/ (gross fixed assets + long-term investment + other assets + working capital) (Note 4). 6. Leverage (1)  Operation leverage= (net sales – variable cost and expenses from operation)/operating income (Note 5). (2)  Financial leverage= operating income/(operating income-operating expenses). Note 4: When using the aforementioned equations for the calculation of earning per share, pay attention to the followings:   1. 1. The number of common shares shall be based on the weighed average method and not the outstanding shares as of the end of the year. 2. 2. Where there may be additional capital raised from the issuance of new shares or may be treasury shares trade, the outstanding period of the shares shall be considered in calculating the weighed average number of outstanding shares. 3. 3. Where there may be the capitalization of retained earnings or of capital surplus, adjustment shall be made in proportion to the amount capitalized when calculating the earning per share for the previous year and the interim period. The term of the capitalization of retained earnings or capital surplus for new capital is not required for consideration. 4. 4. If the preferred shares are non-convertible accumulated preferred shares, the dividend for current period (whether or not being paid out) should be deducted from earning or added to earning. If the preferred shares are not accumulative, dividend for preferred shares should be deducted from earning if there is a surplus. If there is loss after taxation, no adjustment is required. Note 5: When conducting analysis on cash flow, pay attention to the followings:   1. 1. Cash flow from operation shall be referred to the net cash inflow from operation as stated in the statement of cash flow. 2. 2. Capital spending shall be referred to cash outflow for capital investment each year. 3. 3. Addition to inventory shall be referred to the value at the end of the ending period is greater than that of the beginning period. If there is decease in inventory, put a zero. 4. 4. Cash dividend shall be referred to the cash dividends for common shares and preferred shares. 5. 5. Gross fixed assets shall be referred to the total fixed assets before the subtraction of accumulated depreciations Note 6: The issuer shall classify the cost of operation and expenses of operation as fixed and variable. If estimation or subjective judgment is required, constituency with justifiable reasons shall be required.