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Financial Analysis Chapter 5 Page 1 of 4
Financial Analysis: A User Approach
Chapter 5
Multiperiod Quantitative Financial Analysis
Multiperiod Financial Analysis
The ratio analysis we discussed in the last chapter was
presented based on a two-year time series and a cross-
sectional basis
It is often helpful to perform analysis across a longer time
series
Multiperiod analysis can be based on
o Annual data (5 and 10 year times series) and
o Quarterly data (quarter to quarter) and quarter to the
same quarter in the prior year
Financial Analysis Chapter 5 Page 2 of 4
Growth Analysis
Growth rates in dollars and percentages over a five year
period
STX 2003 2004 2005 2006* 2007 2008
Revenues (^) 6,486 6,224 7,553 9,206 11,360 12, Gross Profit (^) 1,727 1,459 1,673 2,137 2,185 3, Net Income (^641 529 707 840 913) 1,
* Maxtor acquired during this year
WDC 2003 2004 2005 2006 2007
Revenues (^) 2,719 3,047 3,639 4,341 5,468 8, Gross Profit (^443 461 590 829 900) 1, Net Income (^179 150 196 395 564 )
STX
Revenues - 4.0% 21.4% 21.9% 23.4% 11.9% 95.9% Gross Profit - 15.5% 14.7% 27.7% 2.2% 46.7% 85.6% Net Income - 17.5% 33.6% 18.8% 8.7% 38.2% 96.9%
WDC
Revenues 12.1% 19.4% 19.3% 26.0% 47.7% 196.9% Gross Profit 4.1% 28.0% 40.5% 8.6% 93.2% 292.6% Net Income - 16.2% 30.7% 101.5% 42.8% 53.7% 384.4%
Financial Analysis Chapter 5 Page 4 of 4
Quarterly Analysis
Useful to gain insight into short-term changes in
performance
Useful to examine changes that are impacted by
seasonality
Q3-CY Q2-CY Q3-PY CY Change CY-PY Change Revenues (^) 3,104 3,420 2,828 (316) 276 COGS (^) 2,288 2,531 2,225 (243) 63 GP (^816 889 603) (73) 213 SG&A (^453 469 356) (16) 97 Net Income (^344 403 212) (59) 132 Q3-CY Q2-CY Q3-PY CY Change CY-PY Change Revenues (^) 100.0% 100.0% 100.0% - 9.2% 9.8% COGS (^) 73.7% 74.0% 78.7% - 9.6% 2.8% GP (^) 26.3% 26.0% 21.3% - 8.2% 35.3% SG&A (^) 14.6% 13.7% 12.6% - 3.4% 27.2% Net Income (^) 11.1% 11.8% 7.5% - 14.6% 62.3%
