罗斯公司理财第二章PPT.ppt

FinancialStatementsandCashFlow,Chapter2,KeyConceptsandSkills,UnderstandtheinformationprovidedbyfinancialstatementsDifferentiatebetweenbookandmarketvaluesKnowthedifferencebetweenaverageandmarginaltaxratesKnowthedifferencebetweenaccountingincomeandcashflowCalculateafirmscashflow,ChapterOutline,2.1TheBalanceSheet2.2TheIncomeStatement2.3Taxes2.4NetWorkingCapital2.5FinancialCashFlow2.6TheAccountingStatementofCashFlows,SourcesofInformation,AnnualreportsWallStreetJournalInternetNYSE()NASDAQ()Textbook()SECEDGAR10K&10Qreports,2.1TheBalanceSheet,AnaccountantssnapshotofthefirmsaccountingvalueataspecificpointintimeTheBalanceSheetIdentityis:AssetsLiabilities+StockholdersEquity,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,Stockholdersequity:,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,Totalliabilitiesandstockholdersequity,$1,879,$1,742,Theassetsarelistedinorderbythelengthoftimeitwouldnormallytakeafirmwithongoingoperationstoconvertthemintocash.Clearly,cashismuchmoreliquidthanproperty,plant,andequipment.,BalanceSheetAnalysis,Whenanalyzingabalancesheet,theFinanceManagershouldbeawareofthreeconcerns:AccountingliquidityDebtversusequityValueversuscost,AccountingLiquidity,ReferstotheeaseandquicknesswithwhichassetscanbeconvertedtocashwithoutasignificantlossinvalueCurrentassetsarethemostliquid.Somefixedassetsareintangible.Themoreliquidafirmsassets,thelesslikelythefirmistoexperienceproblemsmeetingshort-termobligations.Liquidassetsfrequentlyhavelowerratesofreturnthanfixedassets.,DebtversusEquity,Creditorsgenerallyreceivethefirstclaimonthefirmscashflow.Shareholdersequityistheresidualdifferencebetweenassetsandliabilities.,ValueversusCost,UnderGenerallyAcceptedAccountingPrinciples(GAAP),auditedfinancialstatementsoffirmsintheU.S.carryassetsatcost.Marketvalueisthepriceatwhichtheassets,liabilities,andequitycouldactuallybeboughtorsold,whichisacompletelydifferentconceptfromhistoricalcost.,2.2TheIncomeStatement,MeasuresfinancialperformanceoveraspecificperiodoftimeTheaccountingdefinitionofincomeis:RevenueExpensesIncome,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,Theoperationssectionoftheincomestatementreportsthefirmsrevenuesandexpensesfromprincipaloperations.,$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.averagetaxratesMarginalthepercentagepaidonthenextdollarearnedAveragethetaxbill/taxableincomeOthertaxes,MarginalversusAverageRates,Supposeyourfirmearns$4millionintaxableincome.Whatisthefirmstaxliability?Whatistheaveragetaxrate?Whatisthemarginaltaxrate?Ifyouareconsideringaprojectthatwillincreasethefirmstaxableincomeby$1million,whattaxrateshouldyouuseinyouranalysis?,2.4NetWorkingCapital,NetWorkingCapitalCurrentAssetsCurrentLiabilitiesNWCusuallygrowswiththefirm,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,Stockholdersequity:,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,Totalliabilitiesandstockholdersequity,$1,879,$1,742,HereweseeNWCgrowto$275millionin2006from$252millionin2005.,Thisincreaseof$23millionisaninvestmentofthefirm.,2.5FinancialCashFlow,Infinance,themostimportantitemthatcanbeextractedfromfinancialstatementsistheactualcashflowofthefirm.Sincethereisnomagicinfinance,itmustbethecasethatthecashflowreceivedfromthefirmsassetsmustequalthecashflowstothefirmscreditorsandstockholders.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,Thecashflowreceivedfromthefirmsassetsmustequalthecashflowstothefirmscreditorsandstockholders:,-173,-23,$42,$36,6,$42,2.5TheStatementofCashFlows,Thereisanofficialaccountingstatementcalledthestatementofcashflows.Thishelpsexplainthechangeinaccount