ofCashFlows(财务报表分析,加州大学MBA)

OnProjectReport/Readings,Marketvalue,usenumberofsharesoutstanding,donotuseaveragenumberofsharesoutstandingIdentifysourceofdataorquotesCommonsizeanalysis,showamountsandpercentagesOnlyanalyzenotesthatarerelatedtoourcurrentlectureTaketurntowritethereport,donotleavetoonepersonInfinalexams,Imayprovideyouwithrawmaterialsandasamplearticlefromourreadingsforyoutoanalyzetherawmaterialsandwriteasimilararticle.Sogetfamiliarwithallarticles.Again,understandbutdonotmemorize.,FirmNames,EagleEye:ValuationAnalysisStrategyInvestorium,StatementofCashFlow,CashflowfromOperatingactivities:（营运活动）cashreceiptsfromcustomerscashdisbursedto:suppliersofmerchandiseemployeesforsalariesCashflowfrominvestingactivities:（投资活动）purchaseofbuildings,equipments,plantsproceeds(进帐）fromsalesoflongtermassetsCashflowfromfinancingactivities:（融资活动）borrowing/repaylongtermdebtsissuingnewshares,OverviewoftheStatementofCashFlows,InAOL2000balancesheet,cashandcashequivalentincreasedfrom$936millionsto$2,490millions.How?Thestatementofcashflows(a)explainsthereasonsforachangeincash.(b)classifiesthereasonsforthechangeasanoperating,investingorfinancingactivity.(c)reconcilesnetincomewithcashflowfromoperations.,MontgomeryWardb.f.bankrupt,Thedifferencebetweenearningsandcashflows,I/SExplainchangeinretainedearningsI/Sisaccrued-basedI/SrecognizepropertyrightsI/SrequireestimatesI/SisanopinionI/Sisproneto(易于）manipulationFirmscansurvivealongstring（长串）ofnegativeearnings,SCFexplainchangeincashandcashequivalentN/ASCFemphasize“actualpossessment”SCFdoesnotSCFisafactSCFissotoamuchlessdegreeFirmsgobankruptwithalongstringofnegativecashflows(outflow),Cashflowequation,A=L+EA=L+Ecash+non-cashA=L+Ecash+currentA(otherthancash)+non-currentA=currentL+non-currentL+Ecash=currentL+non-currentL+E-currentA(otherthancash)-non-currentA,Cashflowfromoperation,Cashflowsrelatedtosellinggoodsandservices;thatis,theprinciplebusiness(主营业务)ofthefirmThemainsourceofpayoffstoshareholdersandcreditorsThereasonforthefirmstoexistIffirmsdonotinthelongrungeneratemorecashfromoperationthanthereturnsoffundstoshareholdersandcreditors,thefirmsgobankrupt,Cashflowfromoperation-components,CashcollectedfromcustomersCashcollectedasinterest(利息）onloanstoothersCashcollectedasdividends（股利）oninvestmentonotherfirmsstocksCashpaidtosuppliersCashpaidtoemployeesCashpaidtootherserviceproviders:landlords,marketingagency,auditors,consultants,CashpaidtogovernmentCashpaidtocreditorsasinterestonborrowedmoney,Cashflowfrominvestingactivities,Cashflowsrelatedtotheacquisitionorsaleofnon-currentassets:investment,land,property,plants,equipmentsTomaintainthecurrentproductivityoftheoperation,afirmmustreplaceassetsthattheywearout(消耗）Togrowitsoperation,afirmmustacquireadditionalassetsOldassetsmaybesoldastheybecomeobsolete(过时）,orasthefirmchangeproductionInvestingactivitiesthusprovideresourcetogeneratecashflowfromoperations,Cashflowfrominvestingactivities-components,Cashreceivedfromsalesofland,investment,property,plantsandequipmentCashpaidtoacquireland,investment,property,plantsandequipment,Cashflowfromfinancingactivities,Cashflowsrelatedtolong-termliabilitiesandownersequityThesourceofcashtobeusedininvestingandoperatingactivitiesTwosources:shareholdersandcreditorsThispartofSCFalsoindicateshowmuchcashthefirmreturnstoitscapitalproviders,i.e.,cashdistributiontoshareholdersandcreditorsNote:short-termliabilitiesgeneratedinoperation,suchasaccountpayable,isnotrelatedtothiscategory,Cashflowfromfinancingactivities-components,CashreceivedfromissuingcorporatedebtsortakinguploansCashreceivedfromissuingcommonsharesorpreferredsharesCashpaidtorepaydebtsorloansCashpaidtorepurchasesharesCashpaidtoshareholdersasdividends,Relationsamongthecashflowsfromthethreecategoriesofactivities,1,CFfromFin.Act.,CFfromInv.Act,CFFromOp.Act.,FreeCashFlow,=Cashflowfromoperatingactivities+CashflowfrominvestingactivitiesIfpositive,normaloperationgeneratesmorecashthatitconsumes,suchasthecaseofastablefirmIfnegative,normaloperationgeneratesinsufficientamountofcashtobeself-sustaining,suchasagrowingfirm,TwomethodstopreparetheoperatingportionofSCF,Directmethodofpresentationcalculatescashflowfromoperationsbysubtractingcashdisbursementstosupplies,employees,andothersfromcashreceiptsfromcustomers.Theindirectmethodcalculatescashflowfromoperationsbyadjustingnetincomefornoncashrevenuesandexpenses.Mostfirmspresenttheircashflowsusingtheindirectmethod.,SCF-Directmethod,Thedirectmethodissimpleandstraight:CashcollectedfromcustomersCashcollectedasinterest(利息）onloanstoothersCashcollectedasdividends（股利）oninvestmentonotherfirmsstocksCashpaidtosuppliersCashpaidtoemployeesCashpaidtootherserviceproviders:landlords,marketingagency,auditors,consultants,CashpaidtogovernmentCashpaidtocreditorsasinterestonborrowedmoney,IndirectmethodSCFreconcilesnetincomewithcashflowfromoperation,cash=currentL+non-currentL+E-currentA(otherthancash)-non-currentAcash=currentL-currentA(otherthancash)+non-currentL+Enon-currentA,Op.,Fin.,Inv.,IndirectmethodSCFreconcilesnetincomewithcashflowfromoperation,NetIncomeisaccrual-based,whenwecalculatenetincome,wedonotcarewhethercashhasbeenreceivedorpaidButcurrentassetsandcurrentliabilitiesaccountsareimpactedwhenwecalculatenetincome,e.g.,wedebitaccountreceivableandcreditrevenuewhenfinishingasalesactivity,IndirectmethodSCFreconcilesnetincomewithcashflowfromoperation,Sointheexampleabove,netincomeishigherthancashflowfromoperationbecausethistransactionincreasesnetincomebyincreasingrevenues,butdoesnotincreasecashbecausewedebitaccountreceivableandnocashiscollectedyet.Therefore,togettothebalanceofcashfromnetincome,wesubtracttheincreaseinaccountreceivableaccount.Thisprocedureconfirmstothecashequationinwhichincrease(positivechange)incurrentassetsotherthancashdecreasecashflowfromoperation.,IndirectmethodSCFreconcilesnetincomewithcashflowfromoperation,Theindirectmethod:Netincome+depreciationIncreaseincurrentassetsaccounts+decreaseincurrentassetsaccountsdecreaseincurrentliabilitiesaccounts+increaseincurrentliabilitiesaccounts=Cashflowfromoperation,Notestofinancialstatements-oncashflows,Iscashtheking?,CashistheultimatepayoffstocapitalprovidersEstablishedfinancetheorytoldusthethevalu