没太懂

问题如下：

Masson Enterprises Case Scenario

Peter Langer, a credit analyst with a national credit rating agency, is preparing a credit rating for a new client, Masson Enterprises Inc (Masson). Masson operates a chain of 250 retail stores specializing in the hardware and home renovation market. The mid-sized stores are located in suburban malls in the northwestern portion of America. In 2012 Masson built a large distribution center, near Seattle, that the company uses to supply the stores with its products, many of which are made in China. In 2013 Masson made an acquisition of a small regional chain of stores, which resulted in an increase in both assets and debt.

The home renovation industry had been hard hit by an economic slowdown that started in mid-2013. Because Masson’s year-end is October 31, the slowdown only had a small impact on 2013 results, but the full effect will be reflected in the 2014 results. Masson prepares its financial statements according to US GAAP.

In late September 2014 Langer is meeting with his assistant, Evelyn Aubry, who brings to Langer’s attention two transactions undertaken by Masson in fiscal 2014:

1. Masson has started sourcing more of its inventory from China. In September, it took delivery of a large purchase of outdoor Christmas decorations from a Chinese supplier, with payment due on November 15. The company has not hedged the transaction, and our economic group forecasts that the Chinese Yuan will strengthen against the US dollar between now and the company’s year-end (October 31).

2. Masson has announced that at the end of the final quarter of fiscal 2014 it will sell its distribution center to Sequoia Corporation (Sequoia), an enterprise established, but not owned, by Masson. Masson stated that it will be using the proceeds from the sale to pay down long-term debt.

Aubry has prepared projected results for 2014 for Masson based on third-quarter results and other information she obtained from the company. She and Langer are discussing how she reflected the sale of the distribution center in her financial projections and its impact on Masson’s ratios.

Aubry explains:

• Masson is selling the distribution center for $200 million. The net book value of the center would have been $170 million at year-end therefore the company will record a $30 million gain. I reflected the gain in my projections as an increase in net income in 2014. There will be no taxes on this gain due to the availability of loss carry forwards.

• Because the sale will occur at the end of the fiscal year I took a full year’s depreciation for 2014. The $10 million in annual rent expense Masson will pay to Sequoia for the use of the center is the same as the annual depreciation expense they had been taking on the center.

• Given Masson’s stated use for the proceeds, I reduced the total liabilities.

• Assuming the sale goes through, the removal of the net book value of the center from the balance sheet will result in an increase in the company’s asset turnover and ROA.

Langer summarizes key information for the last two years along with Aubry’s projections for 2014, see Exhibit 1.

Exhibit 1

Masson Enterprises Inc. Years Ended October 31 (all figures $ millions, except ROE)

p* Aubry’s projections including the expected sale of the distribution center

Langer is concerned that the sale of the distribution center may not go through. He instructs Aubry to investigate the following ratios under her projections compared to what they would be if the sale doesn’t go through:

1. the ratio of cash flow from operations to net income.

2. the total debt to assets ratio.

Langer notes:

“If the sale does go through, I believe, based on the terms of the agreement, that Sequoia will qualify as a variable interest entity (VIE), and Masson will be considered the primary beneficiary.”

He summarizes the anticipated terms of sale as follows:

1. Masson will sign a 14-year lease for the center with Sequoia. Incidentally, I agree with your assessment of the selling price of the center and the subsequent use of the proceeds.

2. Sequoia will finance the purchase of the center through borrowing arrangements totaling $192 million with a group of financial institutions. The land and building will be pledged as collateral against these loans and Masson will provide unconditional guarantees as well.

3. In return for the guarantees, Masson will be eligible to appoint the majority of the directors to Sequoia’s board.

4. Masson will receive the majority of the profits of Sequoia and absorb the majority of the losses, if any.

Langer finishes:

“If it is a VIE, I believe that means Masson would have to consolidate Sequoia. I wonder how that would affect your projections and our ratio calculations (which are all based on year-end balances).”

Question

If Langer is correct in his belief about Masson’s required accounting treatment of Sequoia, the revised projected ROE for Masson in 2014 would be closest to:

选项：

A.10.9%. B.8.9%. C.9.1%.

解释：

Solution

C is correct. If Langer is correct and Sequoia is a VIE, then on consolidation net income would be reduced by the $30 million gain, and retained earnings (and total equity) would also decrease by the same amount.

A is incorrect. It assumes that no adjustments are needed and number taken from Exhibit 1.

B is incorrect. It adjusts net income (as hinted at in the vignette) but not equity 130/1,465 = 8.87%

中文解析：

这道题考查的是净资产收益率分析。

题干给了，L同学认为，如果出售成功，根据协议，S公司应该被认为是VIE，应该要合并到Masson公司的报表中。

接下来题目问，如果L同学关于M公司合并S公司报表的财务处理方法是正确的，修正后M公司2014年的ROE是多少。

净资产收益率是综合性最强的财务分析指标，投资者最看重的也是这个指标，这个指标还是我们杜邦分析法的核心。

C选项正确，S公司合并到M公司报表中，因为出售是内部交易（M公司增加的30million净利润，S公司减少的30million净利润，合并报表为0。）所以M公司中原来净利润中增加的30million应该减少，对应的equity中的留存收益科目也要减少30million。所以ROE=net income/total equity=(160-30)/(1465-30)=130/1435=9.06%。

A选项错误。因为net income和total equity没有进行调整。

B选项错误。因为只调整了net income，没有调整total equity。