Analysis of growth,performance and generated value(2)

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  • Publicado : 8 de febrero de 2011
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Table of Contents 1 2
2.1 2.2
2.2.1 2.2.2 2.2.3

Explanations and annotations ................................................1 Growth and performance analysis .........................................2
Times interest earned ............................................................. 2 Return on invested capital ...................................................... 3
RETURN ON COMMONEQUITY (ROCE) .................................................................................... 3 EQUITY GROWTH RATE........................................................................................................... 5 SUSTAINABLE EQUITY GROWTH RATE ........................................................................................ 5

2.3
2.3.1 2.3.2

Return on Net OperatingAssets (RNOA) and Return On Assets (ROA) ......................................................................... 6
RETURN ON ASSETS (ROA) .................................................................................................... 6 RETURN ON NET OPERATING ASSETS (RNOA) .......................................................................... 7

2.4
2.4.1 2.4.2

Asset Turnover Ratios............................................................ 8
NET OPERATING ASSETS TURNOVER (NOA-TURNOVER) ............................................................. 8 TOTAL ASSET TURNOVER (TAT) .............................................................................................. 9

2.5

Employee productivity .......................................................... 10

3
3.13.2 3.3

Analysis of Generated Value.................................................10
Weighted Average Cost of Capital (WACC)......................... 10 Economic Value Added (EVA) .............................................. 13 Market Value Added (MVA) .................................................. 14

4

Sources....................................................................................15

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Explanations and annotations

Before having a closer look on the following pages about the analysis of growth, performance and generated value, we would like to give you a short explanation of how our group work was done and how we got to the results of the following two chapters. First of all there was research done by each of the three students on all kind ofavailable literature and web sources in order to find adequate formula and explanations of how to interpret results of the given concepts. In a number of meetings the students decided which formula were to be chosen and where the adequate figures among the number of tables in Continental‟s Annual report 2009 was to find. Having calculated all figures that seemed relevant from the students‟ point ofview, every student now worked on his or her own to find explanations for the calculated results on a selected number of formula.Thus, spelling style, wording and structure may differ in course of the paper although it is still consistent with the HTW-guidelines of formatting. For many of the chosen concepts information about interpretation and judgement of values or basis of comparison couldhardly be found. Please note:  All hints of pages that you may find among the formula refer to the Continental Annual Report 2009 and are not seperatly mentioned in the footnotes  Numbers and calculations are made on the basis of million € if not given other units

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2
2.1

Growth and performance analysis
Times interest earned

The formula for „times interest earned‟ is

„Timesinterest earned‟ or „interest coverage‟ is a ratio that refers to a company‟s capital structure, solvency and profitability in order to analyze its ability to meet longterm financial obligations.1 It sets the overall earnings before interest and taxes in relation to the interest payments and shows how many times a company can cover its interest payments with the realized earnings of the year. In some...
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