《大连海事财务管理研究生公司理财chapter02》由会员分享，可在线阅读，更多相关《大连海事财务管理研究生公司理财chapter02（23页珍藏版）》请在金锄头文库上搜索。
1、Chapter2McGraw-Hill/IrwinCopyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Financial Statements, Taxes, Financial Statements, Taxes, and Cash Flowsand Cash FlowsKey Concepts and SkillsKnow the difference between book value and market valueKnow the difference between accounting i
2、ncome and cash flowKnow the difference between average and marginal tax ratesKnow how to determine a firms cash flow from its financial statements1Chapter OutlineThe Balance SheetThe Income StatementTaxesCash Flow2Balance SheetThe balance sheet is a snapshot of the firms assets and liabilities at a
3、given point in timeAssets are listed in order of liquidityEase of conversion to cashWithout significant loss of valueBalance Sheet IdentityAssets = Liabilities + Stockholders Equity3The Balance Sheet - Figure 2.14Net Working Capital and LiquidityNet Working CapitalCurrent Assets Current LiabilitiesP
4、ositive when the cash that will be received over the next 12 months exceeds the cash that will be paid outUsually positive in a healthy firmLiquidityAbility to convert to cash quickly without a significant loss in valueLiquid firms are less likely to experience financial distressBut liquid assets ea
5、rn a lower returnTrade-off to find balance between liquid and illiquid assets5US Corporation Balance Sheet Table 2.16Market Vs. Book ValueThe balance sheet provides the book value of the assets, liabilities and equity.Market value is the price at which the assets, liabilities or equity can actually
6、be bought or sold.Market value and book value are often very different. Why?Which is more important to the decision-making process?7Example 2.2 Klingon Corporation8Income StatementThe income statement is more like a video of the firms operations for a specified period of time.You generally report re
7、venues first and then deduct any expenses for the periodMatching principle GAAP say to show revenue when it accrues and match the expenses required to generate the revenue9US Corporation Income Statement Table 2.210Work the Web ExamplePublicly traded companies must reports with the Securities and Ex
8、change CommissionThese reports are usually filed electronically and can be searched at the SEC public site called EDGARClick on the web surfer, pick a company and see what you can find!11TaxesThe one thing we can rely on with taxes is that they are always changingMarginal vs. average tax ratesMargin
9、al the percentage paid on the next dollar earnedAverage the tax bill / taxable incomeOther taxes12Example: Marginal Vs. Average RatesSuppose your firm earns $4 million in taxable income.What is the firms tax liability?What is the average tax rate?What is the marginal tax rate?If you are considering
10、a project that will increase the firms taxable income by $1 million, what tax rate should you use in your analysis?13The Concept of Cash FlowCash flow is one of the most important pieces of information that a financial manager can derive from financial statementsThe statement of cash flows does not
11、provide us with the same information that we are looking at hereWe will look at how cash is generated from utilizing assets and how it is paid to those that finance the purchase of the assets14Cash Flow From AssetsCash Flow From Assets (CFFA) = Cash Flow to Creditors + Cash Flow to StockholdersCash
12、Flow From Assets = Operating Cash Flow Net Capital Spending Changes in NWC15Example: US Corporation Part IOCF (I/S) = EBIT + depreciation taxes = $547NCS ( B/S and I/S) = ending net fixed assets beginning net fixed assets + depreciation = $130Changes in NWC (B/S) = ending NWC beginning NWC = $330CFF
13、A = 547 130 330 = $8716Example: US Corporation Part IICF to Creditors (B/S and I/S) = interest paid net new borrowing = $24CF to Stockholders (B/S and I/S) = dividends paid net new equity raised = $63CFFA = 24 + 63 = $8717Cash Flow Summary Table 2.518Example: Balance Sheet and Income Statement Infor
14、mationCurrent Accounts2004: CA = 3625; CL = 17872003: CA = 3596; CL = 2140Fixed Assets and Depreciation2004: NFA = 2194; 2003: NFA = 2261Depreciation Expense = 500Long-term Debt and Equity2004: LTD = 538; Common stock & APIC = 4622003: LTD = 581; Common stock & APIC = 372Income StatementEBIT = 1014;
15、 Taxes = 368Interest Expense = 93; Dividends = 28519Example: Cash FlowsOCF = 1014 + 500 368 = 1146NCS = 2194 2261 + 500 = 433Changes in NWC = (3625 1787) (3596 2140) = 382CFFA = 1146 433 382 = 331CF to Creditors = 93 (538 581) = 136CF to Stockholders = 285 (462 372) = 195CFFA = 136 + 195 = 331The CF
16、 identity holds.20Quick QuizWhat is the difference between book value and market value? Which should we use for decision making purposes?What is the difference between accounting income and cash flow? Which do we need to use when making decisions?What is the difference between average and marginal tax rates? Which should we use when making financial decisions?How do we determine a firms cash flows? What are the equations and where do we find the information?21Chapter2McGraw-Hill/IrwinCopyright 2006 by The McGraw-Hill Companies, Inc. All rights reserved. End of ChapterEnd of Chapter
