Notes for Corporate Finance

Throughout the entirety of the paper I will discuss the purposes of the income statement and the balance sheet; while also identifying the major types of expenses shown on the income statement, and listing major types of assets inside the typical balance sheet. I will also discuss the three different accounts that comprise the owner’s equity on a corporate balance sheet and the three categories of ratios that a business may use in an analysis of its financial statements. Lastly I will explain a statement of cash flows and describe the three standard sections contained in cash flow statements. Since I will be discussing multiple categories, I want to clearly state each one by dividing them into separate sections. Each topic holds dominant relevance to finance and the ability to fully understand a business by comprehending how they work. Having the ability to understand the data projected from a business, is the bone structure for seeing how it grows or regresses. To aid in this understanding I would like to first start off with the income statement.

The paper is to discuss some of the major types of statements that are typically used within business firms to keep track of finances. To further explore these statements, the major components will be identified. Different accounts that make up an owner’s equity section on a corporate balance sheet will also be analyzed. Furthermore three categories of ratios that firms use in analysis and their benefits will be examined.

Firm managers, owners, and lenders, keep track of the firm’s performance by reviewing financial statements, income statement, balance sheet, and statement of cash flows. This portfolio will explain the purpose of income statements and the types of expenses that are shown on an income statement. Also, clarify types of assets and claims of creditors and owners shown on a balance sheet. As well as define the three different accounts that comprise the owners’ equity section on a corporate balance sheet. Furthermore, describe a statement of cash flows and the three standard sections contained within it. Finally, identify the three categories of ratios that a business may use in an analysis of its financial statements and the benefits of calculating these ratios.

The financial statements analysis is very important to various users because it helps to express the overall financial health of the organization (Megan, Hategan, Caciuc, & Cotlet, 2009). Managers use the cash flow statements to determine the cash generated by the operating, investing and financing activities (Gibson, 2013). The statement of cash flow is a step by step presentation of cash inflows and out flows from the company’s operating, investing and financing activities, more so the statement demonstrates liquidity of an organization (Öztürk, 2015). The cash flow statement should report all transactions that affect cash flow. Investors and creditors are interested in the cash flow statement because are able to determine how much capital should be raised for investment, or if the company is able to meet its debt and pay dividends (Gibson, 2013). If no actual cash changes hands in a particular transaction, then the Cash flow statement does not change. This study presents a comprehensive description of the components of the statement of cash flows, the two alternative methods used to present the statement of cash flow, and a comparison between two cash flow statements of two companies; Nike and Tech Data Corporation.

A company’s financial statements contain the true fiscal pulse of the company. If ever there is a need to check the health of a company to see how strong or weak it is fiscally, the financial statements hold the answers. These statements allow shareholders, lenders, and investors the opportunity to assess a number of things about the company such as how it can grow it’s customer base, where it falls short at any particular time, and even how well the company is doing amongst it’s peers. Financial statements also provide key information regarding a company’s accounting principles. The purpose of this paper is to identify and assess each of the documents that make up a firm’s financial statements, which are, the income statement, the balance sheet, and the statement of cash flows.

In order to understand the performance of a firm, the manager within the firm and the firm’s owners and lenders need to have accurate and up to date financial information. This information is contained in three financial statements: the income statement, the balance sheet and the statement of cash funds (Melicher & Norton, 2014). Each of these statements indicates a certain aspect of the financial status of the firm and reveal the critical financial elements of the business; revenues, expenses, assets, liabilities, and equity (Melicher & Norton, 2014). When combined, these financial statements should provide the overall financial status of the firm and indicate the performance of the firm (Melicher & Norton, 2014).

In this report, the reformulated balance sheets, income statements for the last five years have been attached. It also includes a comparative analysis of Balance Sheets and Income statements in terms of common-size and trend. After that, it has also presented a free cash flow and value of the firm in terms of FCF.

Producing financial accounting statement is very crucial for business because it should adequately provide a picture of the financial performance of a business. To concern this issue businesses produce financial statements on regular basis adhering to one common standard. On of these documents is the statement of financial position, also known as a balance sheet. It basically shows business’s assets or resources that it holds against its obligations or claims to other parties (McLaney and Atrill, 2014). Balance sheet analysis is useful for investors to verify the profitability of investment for a business. Analysis can warn of potential problems and, if done accurately determine what the business really “worth”. The aim of this essay is to

Once the decision to invest is taken the next step is to decide the mode of finance suitable to the company based on its analysis, and then they have to decide whether the company has sufficient internal finance available for making investment, or it has to go for external sources such as bank loans. By examining the cash flow critically one can access the company’s policies and procedures related to cash collections, payments, and policies related to financing activities, as well as operating, investing activities. In the analysis of balance sheet there are three areas to be examined assets (fixed and current) Liabilities (fixed and current) and Equity (share capital, Retained earnings, other reserves). Every item in each area provides specific financial information. Income statement includes expenses and income detail (including tax expenses) related to the current period. Although it does not reveal much about the company’s current financial condition, but instill it does provide indications of its future viability. The balance sheet, profit and loss and cash flow statements are interrelated and they all need to study with one another for a more detailed bigger picture of the financial situation of the company. For example company makes sales (P&L) which creates debtors (BS) who pay

This leads to the basic differentiation between wealth maximization and profit maximization approach. There are several arguments of why getting as much profit as possible will not ensure the firm's viability in the long-term. In contrast to wealth maximization, the profit maximization holds on to the following views in term of:

During this week of study we covered distributions to shareholders in the form of dividends and repurchases. We also learned all about capital structure. Capital structure is how a firm finances its overall operations and growth by using different sources of funds (Investopedia, 2014). We know that when analyzing capital structure, a portion of the company’s short term and long term debt is taken into consideration. With that in mind and all the information given this week we were presented with end of chapter questions. In this paper we will answer these questions in detail documenting the facts within.

Accounting is a subset of financial management. Financial transactions must be recorded, classified, stored and eventually reported to the managers.

I- The cardinal objectives of this work is to find out how significant, useful and important is the company’s financial report and statements or information on investment decision. Managers, shareholders, creditors and other interested group seek answers to the following question about a firm: what is the financial position of a firm at a given point in time? How has the firm performed financially over a given period of time? What have been the sources and uses of cash over a given period of time? To answer these questions the following statements have to be considered: balance sheet, profit and loss account, and cash flow statement

Pages A. Introduction 5 B. Brief Overview 6 C. Five main components of Financial Statements 7 4.1. Statements of Financial Position 4.2. Statements of Comprehensive Income 4.3. Statements of Changes in Equity 4.4. Consolidated Cash Flow Statements

Abstract: Cash flow statement is an important document that gives quick and ready information regarding the cash flow analysis of a company. It is a statement depicting change in cash and cash equivalents position during a period. TATA Motors is an Indian Multinational automotive company. It is the world’s fifth largest motor vehicle manufacturing company, fourth largest truck manufacturing company and also the second largest bus manufacturing company by volume. Recently, the concern has reported fluctuating turnover for last five years in its annual reports. Hence, it is necessary to judge the sufficiency of the cash position to support the success story of the company. This study is based on financial figures disclosed by company in five