Department of Management and Law COMMON SIZE ANALYSIS EXERCISE SOLUTION Dr. Camilla Falivena falivena@economia.uniroma2.it
Common-Size Income Statement Common-Size Income Statement for William Demant Company 2016 2015 Sales 100,00% 100,00% Production Costs 24,76% 25,97% GROSS PROFIT 75,24% 74,03% R&D costs 6,99% 7,15% Distribution costs 47,11% 43,97% Administrative expenses 5,63% 5,75% Share of profit after tax, associates and joint ventures 0,67% 0,45% OPERATING PROFIT (EBIT) 16,18% 17,61%
Common-Size Balance Sheet Common-Size Balance Sheet for William Demant Company Assets 2016 2015 Equity and liabilities 2016 2015 Goodwill 40,37% 39,33% Share capital 0,34% 0,38% Patents and licences 0,33% 0,15% Other reserves 44,43% 44,79% Other intangible assets 1,86% 1,91% Equity attributable to Willima Demant Holding A/S's shareholders 44,77% 45,16% Prepayments and assets under development 0,98% 0,14% Equity attributable to minority interests 0,03% 0,01% INTANGIBLE ASSETS 43,53% 41,54% EQUITY 44,80% 45,17% Land and buildings 5,65% 6,25% Interest-bearing debt 12,61% 14,45% Plant and machinery 1,41% 1,27% Deferred tax liabilities 0,98% 0,87% Other plant, fixtures and other equipment 1,87% 1,98% Provisions 1,90% 1,90% Leasehold improvements 1,69% 1,71% Other liabilities 1,10% 0,83% Prepayments and assets under development 0,59% 1,07% Deferred income 1,09% 1,14% PROPERTY, PLANT AND EQUIPMENT 11,20% 12,29% NON-CURRENT LIABILITIES 17,67% 19,19% Investments in associates and joint ventures 3,75% 3,65% Interest-bearing debt 22,81% 21,20% Receivables from associates and joint ventures 2,46% 2,48% Trade payables 3,30% 3,38% Other investments 0,05% 0,08% Payables to associates and joint ventures 0,01% 0,01% Other receivables 3,47% 3,94% Income tax 0,95% 1,01% Deferred tax assets 2,55% 2,61% Provisions 0,21% 0,11% OTHER NON-CURRENT ASSETS 12,28% 12,77% Other liabilities 8,00% 7,63% Unrealised losses on financial contracts 0,30% 0,51% NON-CURRENT ASSETS 67,01% 66,59% Deferred income 1,94% 1,79% CURRENT LIABILITIES 37,52% 35,64% Inventories 8,36% 9,20% Trade receivables 15,69% 15,31% LIABILITIES 55,20% 54,83% Receivables from associates and joint ventures 0,46% 0,37% Income tax 0,94% 0,54% Other receivables 1,67% 1,92% Unrealised gains on financial contracts 0,07% 0,08% Prepaid expenses 1,23% 1,31% Cash 4,57% 4,68% CURRENT ASSETS 32,99% 33,41% TOTAL ASSETS 100,00% 100,00% EQUITY AND LIABILITIES 100,00% 100,00%
Common-Size Cash Flow Statement Common-Size Cash Flow Statement for William Demant Company 2016 2015 % of Net Revenue Operating profit (EBIT) 16,18% 17,61% Non-cash items etc. 3,12% 3,06% Change in receivables etc. -2,44% -2,06% Change in inventories 0,33% -0,90% Change in trade payables and other liabilities etc. 1,13% 0,08% Change in provisions 0,08% 0,11% Dividends received 0,07% 0,74% Cash flow from operating profit 18,48% 18,63% Financial income etc. received 0,26% 0,41% Financial expenses etc. paid -1,14% -1,06% Realised foreign currency translation adjustments -0,06% -0,01% Income tax paid -3,55% -3,05% Cash flow from operating activities (CFFO) 13,99% 14,93% Acquisition of enterprises, participating interests and activities -3,02% -15,31% Disposal of enterprises, participating interests and activities 0,22% 0,00% Investments in and disposal of intangible assets -1,27% -0,45% Investments in property, plant and equipment -2,66% -3,68% Disposal of property, plant and equipment 0,17% 0,17% Investments in other non-current assets -1,66% -2,16% Disposal of other non-current assets 1,62% 1,78% Cash flow from investing activities (CFFI) -6,60% -19,65% Repayments of borrowings -2,92% -13,59% Proceeds from borrowings 6,45% 29,10% Dividends to minority interests -0,02% 0,00% Buy-back of shares -8,75% -5,67% Cash flow from financing activities (CFFF) -5,24% 9,84% Cash flow for the year, net 2,15% 5,11%
Common-Size Income Statement Common-Size Income Statement for Sonova Company 2016 2015 Sales 100,00% 100,00% Cost of sales -31,05% -33,61% GROSS PROFIT 68,95% 66,39% Research and development -5,72% -6,29% Sales and marketing -34,02% -30,80% General and administration -10,14% -9,37% Other income/ (expenses), net 0,26% 0,86% Operating profit before acquisition-related amortization (EBITDA) 19,33% 20,78% Acquistion-related amortization -1,64% -1,31% OPERATING PROFIT (EBIT) 17,69% 19,47%
Common-Size Balance Sheet Common-Size Balance Sheet for Sonova Company Assets 2016 2015 Equity and liabilities 2016 2015 Cash and cash equivalents 9,52% 11,53% Current financial liabilities 0,34% 0,24% Other current nancial assets 0,11% 0,25% Trade payables 2,69% 2,83% Trade receivables 10,50% 12,89% Current income tax liabilities 2,99% 3,41% Current income tax receivables 0,16% 0,28% Other short-term liabilities 6,59% 7,78% Other receivables and prepaid expenses 2,19% 2,53% Short-term provisions 2,85% 3,82% Inventories 6,50% 8,74% TOTAL CURRENT LIABILITIES 15,46% 18,08% TOTAL CURRENT ASSETS 28,98% 36,22% Non-current financial liabilities 19,49% 0,55% Property, plant and equipment 7,88% 9,74% Long-term provisions 4,72% 6,97% Intangible assets 59,03% 49,05% Other long-term liabilities 2,70% 3,44% Investments in associates / joint ventures 0,29% 0,34% Deferred tax liabilities 3,48% 1,67% Other non-current financial assets 0,52% 0,73% TOTAL NON-CURRENT LIABILITIES 30,39% 12,64% Deferred tax assets 3,30% 3,94% TOTAL NON-CURRENT ASSETS 71,02% 63,78% TOTAL LIABILITIES 45,85% 30,72% Share capital 0,08% 0,12% Treasury shares -0,31% -5,66% Retained earnings and reserves 53,80% 73,94% Equity attributable to equity holders of the parent 53,57% 68,41% Non-controlling interests 0,58% 0,87% EQUITY 54,15% 69,28% TOTAL ASSETS 100,00% 100,00% TOTAL LIABILITIES AND EQUITY 100,00% 100,00%
Common-Size Cash Flow Statement Common-Size Cash Flow Statement for Sonova Company 2016 2015 % of Net Revenue Income before taxes 17,42% 19,16% Depreciation, amortization and impairment of tangible and intangible assets 6,15% 4,28% Loss on sale of tangible and intangible assets, net 0,03% 0,04% Share of loss / (gain) in associates / joint ventures, net 0,01% -0,08% Decrease in long-term provisions -1,60% -0,36% Financial (income) / expense, net 0,26% 0,38% Share based payments and other non-cash item 0,83% 0,20% Income taxes paid -1,52% -1,96% Cash flow before changes in net working capital 21,58% 21,67% (Increase) / decrease in trade receivables -1,00% 0,02% (Increase) / decrease in other receivables and prepaid expenses -0,27% 0,21% Decrease in inventories 0,15% 0,24% Increase / (decrease) in trade payables 0,61% -0,55% Increase / (decrease) in other payables, accruals and short-term provisions 0,74% -0,92% Cash flow from operating activities 21,81% 20,68% Purchase of tangible and intangible assets -4,10% -4,01% Proceeds om sale of tangible and intangible assets 0,04% 0,03% Cash consideration for acquisitions, net of cash acquired -28,19% -5,85% Cash consideration om divestments, net of cash divested 0,74% 1,43% Changes in other financial assets -0,06% -0,24% Interest received and realized gain from financial assets 0,05% 0,16% Cash flow from investing activities -31,52% -8,49% Proceeds om borrowings 36,75% 0,00% Repayment of borrowings -17,18% -0,02% (Purchase) / sale of treasury shares, net -1,36% -8,46% Dividends paid by Sonova Holding AG -5,73% -6,57% Transactions with non-controlling interests -0,26% -0,55% Interest paid and other financial expenses -0,10% -0,11% Cash flow from financing activities 12,13% -15,72% Exchange losses on cash and cash equivalents -0,03% -0,01% Cash flow for the year, net 2,39% -3,53%