Financial Analysis
Financial Analysis from 2008 to 2012 (Unconsolidated)
| 2008 | 2009 | 2010 | 2011 | 2012 | ||
|---|---|---|---|---|---|---|
| Capital Structure Analysis | Debt Ratio (%) | 11.87 | 14.26 | 18.12 | 17.31 | 23.57 |
| Long-term Fund to Fixed Assets Ratio (%) |
219.72 | 196.27 | 157.73 | 142.52 | 136.93 | |
| Liquidity Analysis | Current Ratio (%) | 338.70 | 256.07 | 162.88 | 144.79 | 149.73 |
| Quick Ratio (%) | 312.83 | 228.94 | 140.07 | 122.41 | 122.85 | |
| Times Interest Earned (times) |
312.95 | 669.76 | 789.71 | 325.54 | 195.29 | |
| Operating Performance Analysis |
Average Collection Turnover (times) |
11.08 | 11.17 | 10.93 | 10.40 | 11.01 |
| Days Sales Outstanding | 32.93 | 32.66 | 33.40 | 35.09 | 33.14 | |
| Average Inventory Turnover (times) |
10.86 | 10.06 | 9.44 | 9.61 | 9.13 | |
| Average Inventory Turnover Days |
33.59 | 36.29 | 38.67 | 37.97 | 39.97 | |
| Average Payment Turnover (times) |
20.40 | 18.46 | 16.89 | 18.17 | 18.23 | |
| Fixed Assets Turnover (times) |
1.47 | 1.12 | 1.11 | 0.92 | 0.85 | |
| Total Assets Turnover (times) | 0.60 | 0.49 | 0.58 | 0.55 | 0.53 | |
| Profitability Analysis | Return on Total Assets (%) | 18.35 | 15.98 | 25.31 | 18.40 | 19.56 |
| Return on Equity (%) | 20.74 | 18.37 | 30.23 | 22.30 | 24.57 | |
| Operating Income to Paid-in Capital Ratio (%) |
41.48 | 36.49 | 59.76 | 53.60 | 68.20 | |
| Pre-tax Income to Paid-in Capital Ratio (%) |
43.22 | 36.67 | 65.34 | 55.84 | 70.83 | |
| Net Margin (%) | 31.06 | 31.22 | 39.71 | 32.09 | 33.24 | |
| Basic Earnings Per Share (NT$) (Note) |
3.84 | 3.45 | 6.24 | 5.18 | 6.41 | |
| Diluted Earnings Per Share (NT$) (Note) |
3.81 | 3.44 | 6.23 | 5.18 | 6.41 | |
| Cash Flow | Cash Flow Ratio (%) | 399.16 | 214.83 | 188.12 | 217.99 | 199.78 |
| Cash Flow Adequacy Ratio (%) |
134.79 | 122.02 | 109.98 | 99.13 | 93.47 | |
| Cash Flow Reinvestment Ratio (%) |
12.95 | 6.99 | 11.20 | 11.07 | 11.53 | |
| Leverage | Operating Leverage | 2.50 | 2.46 | 2.17 | 2.54 | 2.37 |
| Financial Leverage | 1.00 | 1.00 | 1.00 | 1.00 | 1.01 | |
|
Analysis of deviation of 2012 vs. 2011 over 20% : 1. The debt ratio increased by 36% as a result of increase in bonds payable. 2. The times interest earned decreased by 40%, primarily due to increase in interest expense. 3. The operating income to paid-in capital ratio increased by 27%, mainly due to increase in operating income. 4. The pre-tax income to paid-in capital ratio increased by 27%, primarily due to increase in pre-tax income. 5. The basic and diluted earnings per share both increased by 24%, mainly due to increase in net income. |
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*Glossary
| 1. Capital Structure Analysis | |
| (1) Debt Ratio | = Total Liabilities / Total Assets |
| (2) Long-term Fund to Fixed Assets Ratio | = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets |
| 2. Liquidity Analysis | |
| (1) Current Ratio | = Current Assets / Current Liabilities |
| (2) Quick Ratio | = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities |
| (3) Times Interest Earned | = Earnings before Interest and Taxes / Interest Expenses |
| 3. Operating Performance Analysis | |
| (1) Average Collection Turnover | = Net Sales / Average Trade Receivables |
| (2) Days Sales Outstanding | = 365 / Average Collection Turnover |
| (3) Average Inventory Turnover | = Cost of Sales / Average Inventory |
| (4) Average Inventory Turnover Days | = 365 / Average Inventory Turnover |
| (5) Average Payment Turnover | = Cost of Sales / Average Trade Payables |
| (6) Fixed Assets Turnover | = Net Sales / Net Fixed Assets |
| (7) Total Assets Turnover | = Net Sales / Total Assets |
| 4. Profitability Analysis | |
| (1) Return on Total Assets | = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets |
| (2) Return on Equity | = Net Income / Average Shareholders’ Equity |
| (3) Operating Income to Paid-in Capital Ratio | = Operating Income / Paid-in Capital |
| (4) Pre-tax Income to Paid-in Capital Ratio | = Income before Tax / Paid-in Capital |
| (5) Net Margin | = Net Income / Net Sales |
| (6) Earnings Per Share | = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding |
| 5. Cash Flow | |
| (1) Cash Flow Ratio | = Net Cash Provided by Operating Activities / Current Liabilities |
| (2) Cash Flow Adequacy Ratio | = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend |
| (3) Cash Flow Reinvestment Ratio | = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Fixed Assets + Investments + Other Assets + Working Capital) |
| 6. Leverage | |
| (1) Operating Leverage | = (Net Sales - Variable Cost) / Income from Operations |
| (2) Financial Leverage | = Income from Operations / (Income from Operations - Interest Expenses) |
Financial Analysis from 2008 to 2012 (Consolidated)
| 2008 | 2009 | 2010 | 2011 | 2012 | ||
|---|---|---|---|---|---|---|
| Capital Structure Analysis |
Debts Ratio (%) | 14.05 | 16.08 | 19.50 | 18.37 | 24.01 |
| Long-term Fund to Fixed Assets (%) |
203.81 | 186.51 | 152.08 | 133.06 | 130.83 | |
| Liquidity Analysis | Current Ratio (%) | 444.70 | 328.31 | 212.29 | 192.52 | 177.12 |
| Quick Ratio (%) | 415.32 | 300.15 | 187.57 | 170.06 | 149.81 | |
| Times Interest Earned (times) |
182.26 | 244.85 | 401.30 | 229.27 | 177.80 | |
| Operating Performance Analysis |
Average Collection Turnover (times) |
10.73 | 10.78 | 10.57 | 10.06 | 10.77 |
| Days Sales Outstanding | 34.01 | 33.86 | 34.54 | 36.29 | 33.89 | |
| Average Inventory Turnover (times) |
9.88 | 9.30 | 8.62 | 8.75 | 8.38 | |
| Average Inventory Turnover Days |
36.94 | 39.25 | 42.36 | 41.70 | 43.55 | |
| Average Payment Turnover (times) |
20.02 | 18.77 | 17.23 | 18.77 | 19.39 | |
| Fixed Assets Turnover (times) |
1.37 | 1.08 | 1.08 | 0.87 | 0.82 | |
| Total Assets Turnover (times) |
0.60 | 0.50 | 0.58 | 0.55 | 0.53 | |
| Profitability Analysis | Return on Total Assets (%) |
17.89 | 15.57 | 24.77 | 18.08 | 19.30 |
| Return on Equity (%) | 20.74 | 18.37 | 30.23 | 22.30 | 24.57 | |
| Operating Income to Paid-in Capital Ratio (%) |
40.75 | 35.50 | 61.43 | 54.62 | 69.84 | |
| Pre-tax Income to Paid-in Capital Ratio (%) |
43.50 | 36.85 | 65.72 | 56.01 | 70.03 | |
| Net Margin (%) | 30.17 | 30.25 | 38.68 | 31.48 | 32.78 | |
| Basic Earnings Per Share (NT$) (Note 1) |
3.84 | 3.45 | 6.24 | 5.18 | 6.41 | |
| Diluted Earnings Per Share (NT$) (Note 1) |
3.81 | 3.44 | 6.23 | 5.18 | 6.41 | |
| Cash Flow | Cash Flow Ratio (%) | 389.91 | 202.15 | 186.28 | 211.60 | 202.94 |
| Cash Flow Adequacy Ratio (%) |
139.50 | 126.39 | 113.91 | 101.93 | 95.97 | |
| Cash Flow Reinvestment Ratio (%) |
12.98 | 6.90 | 11.13 | 11.12 | 11.69 | |
| Leverage | Operating Leverage | 2.53 | 2.53 | 2.12 | 2.50 | 2.31 |
| Financial Leverage | 1.01 | 1.00 | 1.00 | 1.00 | 1.01 | |
| Industry Specific Key Performance Indicator |
Billing Utilization Rate (%) | 88 (Note 2) |
75 (Note 2) |
101 (Note 2) |
91 (Note 2) |
91 (Note 2) |
| Advanced Technologies (65-nanometer and below) Percentage of Wafer Sales (%) |
21 | 33 | 46 | 56 | 62 | |
| Sales Growth (%) | 3.3 | -11.2 | 41.9 | 1.8 | 18.5 | |
| Net Income Growth (%) | -8.5 | -10.7 | 81.1 | -17.0 | 23.8 | |
|
Analysis of deviation of 2012 vs. 2011 over 20% : 1. The debt ratio increased by 31% as a result of increase in bonds payable. 2. The times interest earned decreased by 22%, primarily due to increase in interest expense. 3. The operating income to paid-in capital ratio increased by 28%, mainly due to increase in operating income. 4. The pre-tax income to paid-in capital ratio increased by 25%, primarily due to increase in pre-tax income. 5. The basic and diluted earnings per share both increased by 24%, mainly due to increase in net income. |
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Note 2: Capacity includes wafers committed by Vanguard and SSMC.
*Glossary
| 1. Capital Structure Analysis | |
| (1) Debt Ratio | = Total Liabilities / Total Assets |
| (2) Long-term Fund to Fixed Assets Ratio | = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets |
| 2. Liquidity Analysis | |
| (1) Current Ratio | = Current Assets / Current Liabilities |
| (2) Quick Ratio | = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities |
| (3) Times Interest Earned | = Earnings before Interest and Taxes / Interest Expenses |
| 3. Operating Performance Analysis |
|
| (1) Average Collection Turnover | = Net Sales / Average Trade Receivables |
| (2) Days Sales Outstanding | = 365 / Average Collection Turnover |
| (3) Average Inventory Turnover | = Cost of Sales / Average Inventory |
| (4) Average Inventory Turnover Days | = 365 / Average Inventory Turnover |
| (5) Average Payment Turnover | = Cost of Sales / Average Trade Payables |
| (6) Fixed Assets Turnover | = Net Sales / Net Fixed Assets |
| (7) Total Assets Turnover | = Net Sales / Total Assets |
| 4. Profitability Analysis | |
| (1) Return on Total Assets | = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets |
| (2) Return on Equity | = Net Income / Average Shareholders’ Equity |
| (3) Operating Income to Paid-in Capital Ratio | = Operating Income / Paid-in Capital |
| (4) Pre-tax Income to Paid-in Capital Ratio | = Income before Tax / Paid-in Capital |
| (5) Net Margin | = Net Income / Net Sales |
| (6) Earnings Per Share | = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding |
| 5. Cash Flow | |
| (1) Cash Flow Ratio | = Net Cash Provided by Operating Activities / Current Liabilities |
| (2) Cash Flow Adequacy Ratio | = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend |
| (3) Cash Flow Reinvestment Ratio | = (Cash Provided by Operating Activities - Cash Dividends) / (Gross Fixed Assets + Investments + Other Assets + Working Capital) |
| 6. Leverage | |
| (1) Operating Leverage | = (Net Sales - Variable Cost) / Income from Operations |
| (2) Financial Leverage | = Income from Operations / (Income from Operations - Interest Expenses) |