Financial Statement and Cash Flow Analysis

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Chapters 3 and 13 Financial Statement and Cash Flow Analysis Balance Sheet Assets Cash Inventory Accounts Receivable Property Plant Equipment Liabilities and Shareholder’s Equity Accounts Payable Notes Payable Accrued Wages Bank Loans Bonds Common Stock Retained Earnings Total Liabilities and Shareholder’s Equity Total Assets Income Statement Used to figure out how much money we are earning for: (a) (b) (c) (d) vendors, employees, etc - Cost of Goods Sold, Operating Expenses lenders, bondholders - Interest, government - Taxes, owners/stockholders - Dividends/Retained Earnings Sales (-) Cost of Goods Sold (-) Operating Expenses (-) Depreciation EBIT (-) Interest EBT (-) Taxes Net Income (-) Dividends Additions to R/E revenues cost to…show more content…
Adds back in noncash items. Net Operating Working Capital = Operating Current Assets - Operating Current Liabilities Operating = those flows from normal operations Operating Current Assets = Cash, A/R, Inv Operating Current Liabilities = A/P, Accruals Net Operating Profit after Taxes (NOPAT) = EBIT ( 1 - tax rate ) Free Cash Flow (FCF) = NOPAT - Net investment in operating capital Net investment in operating capital = - change in current assets (operating) + change in current liabilities (operating) - change in net capital assets Current asset increase represents an investment Current liability increase represents borrowing Net capital assets = Increase in PPE - Depreciation Market Value Added (MVA) Consistent with shareholder wealth maximization MVA = market value of common stock - initial value of equity capital example: Google, Inc. Google went public (IPO) on August 19, 2004 at $85 per share Google stock value on June 16, 2008 was $366.00 Shares Outstanding = 1.2B MVAGOOG = $439.2B - $102B = $337.2B Economic Value Added (EVA) EVA
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