Asus 2013 Annual Report Download - page 103

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The root causes of the financial ratio change in the last two years:
Times interest earned: Due to the higher interest expense this year, the interest protection multiplies decreased.
Cash flow ratio: The range of increase in cash inflow resulting from this year’s operating activities was greater than the
range of account payable and expenses from inbound materials and other current liabilities, hence the
cash flow ration increased.
Cash reinvestment ratio: The increase in net cash inflow resulting from this year’s operating activities has caused cash
reinvestment ratio to rise.
Note 1: The financial information is audited by CPA.
Note 2: The 2014Q1 financial statements have not yet been audited by CPA up to the date of the report printed on
April 19, 2014.
Note 3: Equations:
1. Financial structure
(1) Ratio of liabilities to assets = Total liabilities / Total assets
(2) Ratio of long-term capital to property, plant and equipment = (Total equity + non-current liabilities) /
Net property, plant and equipment
2. Solvency
(1) Current ratio = Current assets / Current liabilities
(2) Quick ratio = (Current assets – Inventory – Prepaid expenses) / Current liabilities
(3) Times interest earned = Net income before tax and interest expense / Interest expense of the year
3. Operating ability
(1) Account receivable turnover (including accounts receivable and notes receivable derived from
business operation) = Net sales / Average accounts receivable (including accounts receivable and
notes receivable derived from business operation)
(2) Days sales in accounts receivable = 365 / Account receivable turnover
(3) Inventory turnover = Cost of goods sold / Average inventory amount
(4) Account payable turnover (including accounts payable and notes payable derived from business
operation) = Cost of goods sold/ Average accounts payable (including accounts payable and notes
payable derived from business operation)
(5) Average days in sales = 365 / Inventory turnover
(6) Property, plant and equipment turnover = Net sales / Average net property, plant and equipment
(7) Total assets turnover = Net sales / Average total assets
4. Profitability
(1) Ratio of return on total assets = [Net income (loss) + interest expense x (1-tax rate)] / Average total
assets
(2) Ratio of return on equity = Net income (loss) / Net average total equity
(3) Ratio of profit before tax to paid-in capital = Net income before tax / Paid-in capital
(4) Profit ratio = Net income (loss) / Net sales
(5) Earnings per share = (Profit attributable to shareholders of the parent – preferred stock dividend) /
Weighted average stock shares issued (Note 4)
5. Cash flow
(1) Cash flow ratio = Net cash flow from operating activity / Current liabilities
(2) Cash flow adequacy ratio = Net cash flow from operating activity in the past five years / (Capital
expenditure + Inventory increase + Cash dividend) in the past five years
(3) Cash reinvestment ratio = (Net cash flow from operating activity – Cash dividend) / (Gross property,
plant and equipment + Long-term investment + Other non-current assets + Working capital) (Note 5)
6. Leverage:
(1) Degree of operating leverage = (Net operating revenue – Variable operating cost and expense) /
Operating income (Note 6)
(2) Degree of financial leverage = Operating income / (Operating income – interest expense)