罗斯公司理财-第二章ppt课件.ppt

FinancialStatementsandCashFlow Chapter2 KeyConceptsandSkills UnderstandtheinformationprovidedbyfinancialstatementsDifferentiatebetweenbookandmarketvaluesKnowthedifferencebetweenaverageandmarginaltaxratesKnowthedifferencebetweenaccountingincomeandcashflowCalculateafirm scashflow ChapterOutline 2 1TheBalanceSheet2 2TheIncomeStatement2 3Taxes2 4NetWorkingCapital2 5FinancialCashFlow2 6TheAccountingStatementofCashFlows SourcesofInformation AnnualreportsWallStreetJournalInternetNYSE NASDAQ Textbook SECEDGAR10K 10Qreports 2 1TheBalanceSheet Anaccountant ssnapshotofthefirm saccountingvalueataspecificpointintimeTheBalanceSheetIdentityis Assets Liabilities Stockholder sEquity U S CompositeCorporationBalanceSheet 2006 2005 2006 2005 Currentassets CurrentLiabilities Cashandequivalents 140 107 Accountspayable 213 197 Accountsreceivable 294 270 Notespayable 50 53 Inventories 269 280 Accruedexpenses 223 205 Other 58 50 Totalcurrentliabilities 486 455 Totalcurrentassets 761 707 Long termliabilities Fixedassets Deferredtaxes 117 104 Property plant andequipment 1 423 1 274 Long termdebt 471 458 Lessaccumulateddepreciation 550 460 Totallong termliabilities 588 562 Netproperty plant andequipment 873 814 Intangibleassetsandother 245 221 Stockholder sequity Totalfixedassets 1 118 1 035 Preferredstock 39 39 Commonstock 1pervalue 55 32 Capitalsurplus 347 327 Accumulatedretainedearnings 390 347 Lesstreasurystock 26 20 Totalequity 805 725 Totalassets 1 879 1 742 Totalliabilitiesandstockholder sequity 1 879 1 742 Theassetsarelistedinorderbythelengthoftimeitwouldnormallytakeafirmwithongoingoperationstoconvertthemintocash Clearly cashismuchmoreliquidthanproperty plant andequipment BalanceSheetAnalysis Whenanalyzingabalancesheet theFinanceManagershouldbeawareofthreeconcerns AccountingliquidityDebtversusequityValueversuscost AccountingLiquidity Referstotheeaseandquicknesswithwhichassetscanbeconvertedtocash withoutasignificantlossinvalueCurrentassetsarethemostliquid Somefixedassetsareintangible Themoreliquidafirm sassets thelesslikelythefirmistoexperienceproblemsmeetingshort termobligations Liquidassetsfrequentlyhavelowerratesofreturnthanfixedassets DebtversusEquity Creditorsgenerallyreceivethefirstclaimonthefirm scashflow Shareholder sequityistheresidualdifferencebetweenassetsandliabilities ValueversusCost UnderGenerallyAcceptedAccountingPrinciples GAAP auditedfinancialstatementsoffirmsintheU S carryassetsatcost Marketvalueisthepriceatwhichtheassets liabilities andequitycouldactuallybeboughtorsold whichisacompletelydifferentconceptfromhistoricalcost 2 2TheIncomeStatement MeasuresfinancialperformanceoveraspecificperiodoftimeTheaccountingdefinitionofincomeis Revenue Expenses Income U S C C IncomeStatement Totaloperatingrevenues Costofgoodssold Selling general andadministrativeexpenses Depreciation Operatingincome Otherincome Earningsbeforeinterestandtaxes Interestexpense Pretaxincome Taxes Current 71 Deferred 13 Netincome Additiontoretainedearnings 43 Dividends 43 Theoperationssectionoftheincomestatementreportsthefirm srevenuesandexpensesfromprincipaloperations 2 262 1 655 327 90 190 29 219 49 170 84 86 Totaloperatingrevenues 2 262 Costofgoodssold 1 655 Selling general andadministrativeexpenses 327 Depreciation 90 Operatingincome 190 Otherincome 29 Earningsbeforeinterestandtaxes 219 Interestexpense 49 Pretaxincome 170 Taxes 84 Current 71 Deferred 13 Netincome 86 Additiontoretainedearnings 43 Dividends 43 Thenon operatingsectionoftheincomestatementincludesallfinancingcosts suchasinterestexpense U S C C IncomeStatement Totaloperatingrevenues Costofgoodssold Selling general andadministrativeexpenses Depreciation Operatingincome Otherincome Earningsbeforeinterestandtaxes Interestexpense Pretaxincome Taxes Current 71 Deferred 13 Netincome Additiontoretainedearnings 43 Dividends 43 Usuallyaseparatesectionreportstheamountoftaxesleviedonincome 2 262 1 655 327 90 190 29 219 49 170 84 86 U S C C IncomeStatement Totaloperatingrevenues Costofgoodssold Selling general andadministrativeexpenses Depreciation Operatingincome Otherincome Earningsbeforeinterestandtaxes Interestexpense Pretaxincome Taxes Current 71 Deferred 13 Netincome Retainedearnings 43 Dividends 43 Netincomeisthe bottomline 2 262 1 655 327 90 190 29 219 49 170 84 86 U S C C IncomeStatement IncomeStatementAnalysis Therearethreethingstokeepinmindwhenanalyzinganincomestatement GenerallyAcceptedAccountingPrinciples GAAP Non CashItemsTimeandCosts GAAP ThematchingprincipalofGAAPdictatesthatrevenuesbematchedwithexpenses Thus incomeisreportedwhenitisearned eventhoughnocashflowmayhaveoccurred Non CashItems Depreciationisthemostapparent Nofirmeverwritesacheckfor depreciation Anothernon cashitemisdeferredtaxes whichdoesnotrepresentacashflow Thus netincomeisnotcash TimeandCosts Intheshort run certainequipment resources andcommitmentsofthefirmarefixed butthefirmcanvarysuchinputsaslaborandrawmaterials Inthelong run allinputsofproduction andhencecosts arevariable Financialaccountantsdonotdistinguishbetweenvariablecostsandfixedcosts Instead accountingcostsusuallyfitintoaclassificationthatdistinguishesproductcostsfromperiodcosts 2 3Taxes TheonethingwecanrelyonwithtaxesisthattheyarealwayschangingMarginalvs averagetaxratesMarginal thepercentagepaidonthenextdollarearnedAverage thetaxbill taxableincomeOthertaxes MarginalversusAverageRates Supposeyourfirmearns 4millionintaxableincome Whatisthefirm staxliability Whatistheaveragetaxrate Whatisthemarginaltaxrate Ifyouareconsideringaprojectthatwillincreasethefirm staxableincomeby 1million whattaxrateshouldyouuseinyouranalysis 2 4NetWorkingCapital NetWorkingCapital CurrentAssets CurrentLiabilitiesNWCusuallygrowswiththefirm U S C C BalanceSheet 2006 2005 2006 2005 Currentassets CurrentLiabilities Cashandequivalents 140 107 Accountspayable 213 197 Accountsreceivable 294 270 Notespayable 50 53 Inventories 269 280 Accruedexpenses 223 205 Other 58 50 Totalcurrentliabilities 486 455 Totalcurrentassets 761 707 Long termliabilities Fixedassets Deferredtaxes 117 104 Property plant andequipment 1 423 1 274 Long termdebt 471 458 Lessaccumulateddepreciation 550 460 Totallong termliabilities 588 562 Netproperty plant andequipment 873 814 Intangibleassetsandother 245 221 Stockholder sequity Totalfixedassets 1 118 1 035 Preferredstock 39 39 Commonstock 1parvalue 55 32 Capitalsurplus 347 327 Accumulatedretainedearnings 390 347 Lesstreasurystock 26 20 Totalequity 805 725 Totalassets 1 879 1 742 Totalliabilitiesandstockholder sequity 1 879 1 742 HereweseeNWCgrowto 275millionin2006from 252millionin2005 Thisincreaseof 23millionisaninvestmentofthefirm 2 5FinancialCashFlow Infinance themostimportantitemthatcanbeextractedfromfinancialstatementsistheactualcashflowofthefirm Sincethereisnomagicinfinance itmustbethecasethatthecashflowreceivedfromthefirm sassetsmustequalthecashflowstothefirm screditorsandstockholders CF A CF B CF S U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending 173 Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital 23 Total 42 CashFlowofInvestorsintheFirm Debt 36 Interestplusretirementofdebt minuslong termdebtfinancing Equity 6 Dividendsplusrepurchaseof equityminusnewequityfinancing Total 42 OperatingCashFlow EBIT 219Depreciation 90CurrentTaxes 71OCF 238 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total CapitalSpendingPurchaseoffixedassets 198Salesoffixedassets 25CapitalSpending 173 173 23 42 36 6 42 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total NWCgrewfrom 275millionin2006from 252millionin2005 Thisincreaseof 23millionistheadditiontoNWC 173 23 42 36 6 42 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total 173 23 42 36 6 42 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total CashFlowtoCreditorsInterest 49Retirementofdebt73Debtservice122Proceedsfromnewdebtsales 86Total 36 173 23 42 36 6 42 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total CashFlowtoStockholdersDividends 43Repurchaseofstock6CashtoStockholders49Proceedsfromnewstockissue 43Total 6 173 23 42 36 6 42 U S C C FinancialCashFlow CashFlowoftheFirm Operatingcashflow 238 Earningsbeforeinterestandtaxes plusdepreciationminustaxes Capitalspending Acquisitionsoffixedassets minussalesoffixedassets Additionstonetworkingcapital Total CashFlowofInvestorsintheFirm Debt Interestplusretirementofdebt minuslong termdebtfinancing Equity Dividendsplusrepurchaseof equityminusnewequityfinancing Total Thecashflowreceivedfromthefirm sassetsmustequalthecashflowstothefirm screditorsandstockholders 173 23 42 36 6 42 2 5TheStatementofCashFlows Thereisanofficialaccountingstatementcalledthestatementofcashflows Thishelpsexplainthechangeinaccounting