Advanced Corporate Finance. 2. Financial Planning, from Accounting to Free Cash Flows
|
|
|
- Claribel McDonald
- 8 years ago
- Views:
Transcription
1 Advanced Corporate Finance 2. Financial Planning, from Accounting to Free Cash Flows
2 Objectives of the session 1. Show how to use accounting information to compute cash flows 2. Understand and compute free cash flows (FCF) 3. Introduce financial forecasting (income statement, statement of cash flows, balance sheet) 4. Introduce the sustainable growth rate of a company 2
3 Summarized balance sheet Assets Liabilities Fixed assets (FA) Stockholders' equity (SE) Working capital requirement (WCR) Interest-bearing debt (D) Cash (Cash) FA + WCR + Cash = SE + D Working capital requirement : definition + Accounts receivable + Inventories + Prepaid expenses - Account payable - Accrued payroll and other expenses Interest-bearing debt: definition + Long-term debt + Current maturities of long term debt + Notes payable to banks 3
4 Net Working Capital Net working capital can be understood in two ways: as an investment to be funded: Current Assets - Current Liabilities as a source of financing=stockholders' equity + LT debt - Fixed Assets Fixed Assets Stockholder s equity Current ratio: a measure of NWC Current ratio = Current assets / Current liabilites Current Assets Net Working Capital Long term debt Current liabilities Net working capital = Current assets - Current liabilites Current ratio > 1 NWC > 0 4
5 Notations Income statement REV Revenue CGS Cost of goods sold SGA Selling, general and administrative expenses Dep Depreciation EBIT Earnings before interest and taxes Int Interest expenses TAX Taxes T c Tax rate NI Net income Balance sheet FA Fixed assets, net AR Accounts receivable INV Inventories CASH Cash & cash equivalents SE Equity capital LTD Long term debt AP Accounts payable STD fin Short-term borrowing Statement of retained income DIV Dividends 5
6 Net Working Capital vs Working Capital Requirement Summarized balance sheet identity: FA + WCR + CASH = SE + LTD + STD can be written as: WCR + (CASH - STD fin ) = (SE + LTD - FA) Working Capital Requirement Net Liquid Balance Net Working Capital WCR + NLB = NWC 6
7 Sources of Cash In and Out flows Operating Activities Sales of goods and services Investing Activities Sale of fixed assets Sales of LT financial assets Financing Activities Issuance of stocks and bonds LT and ST borrowing CASH Operating Activities Purchase of supplies Selling, general and administrative expenses Tax expenses CF from operating activities Investing Activities Capital expenditures and acquisitions LT financial investments CF from investing activities Financing Activities Repurchage of stocks and bonds Repayment of debt Dividend payment CF from financing activities 7
8 Example (Dour Music Festival Balance Sheet, 2009, Assets) Assets Fixed Assets (FA) Financial Fixed assets Current Assets Accounts receivable < one year Cash and cash equivalents TOTAL
9 Example (Dour Music Festival Balance Sheet, 2009, Liabilities) Liabilities Equity Equity Reserves Reported P&L Debts LT debts ST Debts Financial debts Accounts payable Social security and wages due Other current liabilities TOTAL
10 WCR, NWC, Cash NWC = SE + LTD - FA = 817, = 816,745 NLB = CASH - STD fin = 1,659,443 WCR = (2,037,080 1,659,443) 1,220,335 = - 842,698 Check: NLB = NWC - WCR = 816,745 (-842,698) = 1,659,443 But what about Free Cash Flows? 10
11 Example (Dour Music Festival income statement, 2009) Operating Profit Interest received Interest paid Current Gain/Losses Extraordinary Income Extraordinary expenses Profit (loss) before taxes Taxes Tc 33,60% 35,90% Profit (loss) after taxes Dividend
12 Income statement and balance sheet Income statement EBIT = REV - CGS - SGA Dep = 531,410-13,344 = 518,066 TAX = T c (EBIT - Int) = 33,6% x (518, ,277) = 222,572 NI = EBIT - Int TAX = 518, , ,572 = 439,771 Balance sheet equation FA + AR + INV + CASH = SE + LTD + AP + STD , ,659,443 = 817, ,220,335+0 Working capital requirement: WCR AR + INV - AP =(Current assets - CASH) - (Current liabilities - STD) = - 842,698 Summarised balance sheet: FA + WCR + CASH = SE + D (D = LTD + STD fin ) , ,659,443 = 817, = 817,343 12
13 Cash flow statement : indirect method FA + WCR + CASH = SE + D FA = AQ - AMO AQ = Acquisitions - Disposals (investing & divesting) = = 400 WCR = -842,698 (-1,326,966) = 484,268 Cash = 2,104,340 1,659,443 = -444,897 SE = NI - DIV + K = 439, , =39,771 K = New issuance of capital 13
14 Cash flow statement : indirect method (NI + AMO - WCR) - (AQ) + ( K + D -DIV) = CASH Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities + + = CASH 439, ,268 + (-400) + (-400,000) = -444,897-44,497 + (-400) -400,000 = -444,897 14
15 Statement of cash flows: direct method + Cash collection from customers - Cash payment to suppliers and employees - Cash paid for interest - Cash paid for taxes = Cash flow from operating activities + Cash flow from investing activities REV - AR CGS + INV + SGA - AP Int TAX (REV-CGS-SGA-Int-TAX)- WCR -AQ NI+Dep- WCR + Cash flow from financing activity K + D - DIV = CASH (NI + Dep - WCR) + (-AQ) + ( K + D - DIV) = CASH 15
16 Free Cash Flow Several definitions Free Cash Flow = Cash flow from operating activities + Cash flow from investing activities Calculating free cash flows of all equity firm: Free Cash Flow = EBIT(1-T C ) + Dep - WCR - AQ Statement of cash flows for all-equity firm: Free Cash Flow = DIV - K + Cash 16
17 Free Cash Flow to Equity Free Cash Flow to Equity = Cash the company can afford to return to its stockholders (NI + Dep - WCR) + (-AQ) + ( K + D - DIV) = CASH Calculating free cash flows to equity: Free Cash Flow to Equity = NI (AQ Dep) - WCR + D Amount which may be used to buyback shares or pay dividends Since Free Cash Flow to Equity = - K + DIV + CASH 17
18 Financial Forecasting Income Statement Statement of Cash Flows EBITDA -Depreciation =EBIT -Taxes = Net Income CF from operating activities CF from investing activities CF from financing activities Update Balance Sheet 18
19 Financial Planning Based on Revenues Assumptions on key ratios relating Revenues to: Gross margin: m = EBITDA /Revenues Working capital requirement: w = WCR / Revenues Net fixed assets: a = NFA / Revenues Financial policy: Payout ratio p = DIV/Net Income Depreciation d = Depreciation / Fixed Assets -1 Environment: Tax rate T C Cost of debt i 19
20 Data Revenues year 0: 2,000 Growth rate year 1: 25% Balance sheet end year 0 Net Fixed Assets 600 Working Capital Requirement 400 Gross margin: m = 30% WCR: w = 20% Net fixed assets: a = 30% Payout ratio p = 50% Depreciation d = 10% Tax rate T C = 40% Cost of debt i = 10% Cash 0 Total Assets 1,000 Book Equity 600 Debt (financial) 400 Total Liabilities + Stockholders equity 1,000 20
21 Step 1: Income statement Year 0 Year 1 Sales 2,000 2,500 Rev -1 (1+g) EBITDA 750 m Rev Depreciation 60 d NFA -1 EBIT 690 Interests 40 i D -1 Taxes 260 Net Income
22 Step 2: Statement of Cash Flows Year 0 Year 1 Net Income 390 From Income Stat. Depreciation 60 From Income Stat. WCR 100 w Revenues CF from operations 350 NFA 150 a Revenues Depreciation 60 CF from investing -210 Div 195 p Net Income Stock Issues/buy back 0 Assumption Debt 55 Plug CF from financing -140 Cash 0 22
23 Step 3: Update balance sheet Year 0 Year 1 Net Fixed Assets NFA -1 + Inv Dep Working Capital WCR -1 + WCR Cash 0 0 Cash -1 + Cash 1,000 1,250 Book Equity BEq -1 +SI + NI DIV Debt D -1 + D 1,000 1,250 23
24 The Full Model Financial planning Sales growth rate 25% Gross margin 30% Depreciation rate 10% Cost of debt 10% Tax rate 40% Payout 50% WC/Sales 20% NFA/Sales 30% Year 0 Year 1 Year 2 Year 3 Year 4 Income Statement Sales 2,000 2,500 3,125 3,906 4,883 EBITDA ,172 1,465 Depreciation EBIT ,078 1,348 Interest Expenses Taxes Net Income Statement of Cash Flows Earnings Depreciation Var WCR Operating Cash Flow Var Net Fixed Assets Depreciation Cash Flow from Invest Dividends Var Book Equity Var Debt CF from Financing Var Cash Balance Sheet Fixed assets ,172 1,465 Working Capital Cash ,000 1,250 1,563 1,953 2,441 Book Equity ,040 1,348 1,734 Debt (Financial) ,000 1,250 1,563 1,953 2,441 24
25 Sustainable growth What growth rate can a company achieve without requirement additional external equity? Assets = (a+w) Revenues Assets = Book Equity + Debt = Book Equity + λ Book Equity = Net Income (1 Payout)(1 + λ) = (Revenues) (Profit Margin)(1-Payout)(1+ λ) g = Revenues / Revenues = (Profit Margin)(1 Payout)(1+ λ) / (a+w) 25
26 Sustainable Growth: example Back to previous example: a+w = 0.50 Net Profit margin = 15,60% Payout ratio = 50% λ = Debt / Book Equity = 28.2% g = [15% (1-0.50) (1+28.2%) ] / 0.50 = 20% 26
MBA Finance Part-Time Financial Statement Analysis and Cash Flows
MBA Finance Part-Time Financial Statement Analysis and Cash Flows Professor Hugues Pirotte Spéder 1 1 Levers of Performance Return on Equity Return on Invested Capital Leverage Profit Margin Asset Turnover
Chapter 6 Statement of Cash Flows
Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions
CASH FLOW STATEMENT. On the statement, cash flows are segregated based on source:
CASH FLOW STATEMENT On the statement, cash flows are segregated based on source: Operating activities: involve the cash effects of transactions that enter into the determination of net income. Investing
1. Operating, Investment and Financial Cash Flows
1. Operating, Investment and Financial Cash Flows Solutions Problem 1 During 2005, Myears Oil Co. had gross sales of $1 000,000, cost of goods sold of $400,000, and general and selling expenses of $300,000.
Chapters 3 and 13 Financial Statement and Cash Flow Analysis
Chapters 3 and 13 Financial Statement and Cash Flow Analysis Balance Sheet Assets Cash Inventory Accounts Receivable Property Plant Equipment Total Assets Liabilities and Shareholder s Equity Accounts
14. Calculating Total Cash Flows.
14. Calculating Total Cash Flows. Greene Co. shows the following information on its 2008 income statement: Sales = $138,000 Costs = $71,500 Other expenses = $4,100 Depreciation expense = $10,100 Interest
2-8. Identify whether each of the following items increases or decreases cash flow:
Problems 2-8. Identify whether each of the following items increases or decreases cash flow: Increase in accounts receivable Increase in notes payable Depreciation expense Increase in investments Decrease
CHAPTER 2 ACCOUNTING STATEMENTS, TAXES, AND CASH FLOW
CHAPTER 2 ACCOUNTING STATEMENTS, TAXES, AND CASH FLOW Answers to Concepts Review and Critical Thinking Questions 1. True. Every asset can be converted to cash at some price. However, when we are referring
ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL)
Page 1 ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL) Complete these sample exam problems/objective questions and check your answers with the solutions at the end of the review file and identify where
EMERSON AND SUBSIDIARIES CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)
CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) TABLE 1 Quarter Ended March 31, Percent Change Net Sales $ 5,854 $ 5,919 1% Costs and expenses: Cost of sales 3,548 3,583
E2-2: Identifying Financing, Investing and Operating Transactions?
E2-2: Identifying Financing, Investing and Operating Transactions? Listed below are eight transactions. In each case, identify whether the transaction is an example of financing, investing or operating
TOPIC LEARNING OBJECTIVE
Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation
Mastering the Cash Flow Statement & Free Cash Flow
Mastering the Cash & Free Cash Flow CFA Levels I & II Jonathan.bone@kaplan.co.uk Financial Reporting and Analysis LOS 27.a Compare/Classify: CFAI pg 253 Schweser pg 109 Importance of Cash Net income from
Understanding Cash Flow Statements
Understanding Cash Flow Statements 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Components and Format of the Cash Flow Statement... 3 3. The
MASTER BUDGET - EXAMPLE
MASTER BUDGET - EXAMPLE Sales IN UNITS for the previous two months (of last quarter), as well as the sales forecast for next quarter are as follows: Sales Budget Units May sales (ACTUAL) 20 June sales
Consolidated Interim Earnings Report
Consolidated Interim Earnings Report For the Six Months Ended 30th September, 2003 23th Octorber, 2003 Hitachi Capital Corporation These financial statements were prepared for the interim earnings release
Chapter 2 Financial Statement and Cash Flow Analysis
Chapter 2 Financial Statement and Cash Flow Analysis MULTIPLE CHOICE 1. Which of the following items can be found on an income statement? a. Accounts receivable b. Long-term debt c. Sales d. Inventory
Statement of Cash Flows
THE CONTENT AND VALUE OF THE STATEMENT OF CASH FLOWS The cash flow statement reconciles beginning and ending cash by presenting the cash receipts and cash disbursements of an enterprise for an accounting
CASH FLOW CALCULATION: THE IMPORTANCE OF WORKING CAPITAL
CASH FLOW CALCULATION: THE IMPORTANCE OF WORKING CAPITAL Lesson 5 Castellanza, 15 th October 2014 SUMMARY Financial statements a brief review Financial statements and cash flows The cash source / cash
Computing Liquidity Ratios Current Ratio = CA / CL 708 / 540 = 1.31 times Quick Ratio = (CA Inventory) / CL (708 422) / 540 =.53 times Cash Ratio =
1 Computing Liquidity Ratios Current Ratio = CA / CL 708 / 540 = 1.31 times Quick Ratio = (CA Inventory) / CL (708 422) / 540 =.53 times Cash Ratio = Cash / CL 98 / 540 =.18 times 2 Computing Leverage
* * * Chapter 15 Accounting & Financial Statements. Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall
Chapter 15 Accounting & Financial Statements Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall Bookkeeping vs. Accounting Bookkeeping Accounting The recording of business transactions.
Ratio Analysis. A) Liquidity Ratio : - 1) Current ratio = Current asset Current Liability
A) Liquidity Ratio : - Ratio Analysis 1) Current ratio = Current asset Current Liability 2) Quick ratio or Acid Test ratio = Quick Asset Quick liability Quick Asset = Current Asset Stock Quick Liability
CHAPTER 2 FINANCIAL STATEMENTS AND CASH FLOW
CHAPTER 2 FINANCIAL STATEMENTS AND CASH FLOW Solutions to Questions and Problems NOTE: All end-of-chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and
Long-Term Financial Planning and Growth
Long-Term Financial Planning and Growth What is Financial Planning Firms must plan for both the short term and the long term. Short-term planning rarely looks further ahead than the next 12 months. It
Income Measurement and Profitability Analysis
PROFITABILITY ANALYSIS The following financial statements for Spencer Company will be used to demonstrate the calculation of the various ratios in profitability analysis. Spencer Company Comparative Balance
13:11. Statement of Cash Flows. Chapter. Illustration. Statement of Cash Flows- summary. Overview
Overview Statement of Cash Flows Chapter 23 BECAUSE of the SCF, users of the financial statements get the best of both worlds! SCF bridges the gap created by paper income resulting from applying an accrual
CASH MANAGEMENT & FINANCING CHOICES THE DEBT MARKET
CASH MANAGEMENT & FINANCING CHOICES THE DEBT MARKET Lesson 6&7 Castellanza, 21 st October 4 th November2015 LESSON5: EXAMPLEN 2 Compute the cash source / cash use prospect and the cash flow statement of
Chapter 12 Financial Planning and Forecasting Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS
Chapter 12 Financial Planning and Forecasting Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS 12-1 a. The operating plan provides detailed implementation guidance designed to accomplish corporate
Statement of Cash Flows
HOSP 2110 (Management Acct) Learning Centre Statement of Cash Flows The Statement of Cash Flows (or cash flow statement) is one of the main financial statements used by investors. It shows the cash generated
PROFITCENTS ANALYTICAL PROCEDURES EXPECTED VALUE METHODOLOGY
PROFITCENTS ANALYTICAL PROCEDURES EXPECTED VALUE METHODOLOGY INTRODUCTION This document includes an analysis of the projection methodology used in ProfitCents Analytical Procedures in calculating expectations
CHAPTER 3 LONG-TERM FINANCIAL PLANNING AND GROWTH
CHAPTER 3 LONG-TERM FINANCIAL PLANNING AND GROWTH Answers to Concepts Review and Critical Thinking Questions 5. The sustainable growth rate is greater than 20 percent, because at a 20 percent growth rate
STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS
C H A P T E R 1 0 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS I N T R O D U C T I O N Historically, profit-oriented businesses have used the accrual basis of accounting in which the income statement,
John A. Jaeger, CCE Manager Credit & Accounts Receivable Follett Higher Education Group. Extend Credit Management Financial Analyst Investor
John A. Jaeger, CCE Manager Credit & Accounts Receivable Follett Higher Education Group Extend Credit Management Financial Analyst Investor Establish the Objectives Study the Industry and Economic Climate
FINANCIAL MANAGEMENT
100 Arbor Drive, Suite 108 Christiansburg, VA 24073 Voice: 540-381-9333 FAX: 540-381-8319 www.becpas.com Providing Professional Business Advisory & Consulting Services Douglas L. Johnston, II djohnston@becpas.com
RAPID REVIEW Chapter Content
RAPID REVIEW BASIC ACCOUNTING EQUATION (Chapter 2) INVENTORY (Chapters 5 and 6) Basic Equation Assets Owner s Equity Expanded Owner s Owner s Assets Equation = Liabilities Capital Drawing Revenues Debit
Chapter 1 Financial Statement and Cash Flow Analysis
Chapter 1 Financial Statement and Cash Flow Analysis MULTIPLE CHOICE 1. Which of the following items can be found on an income statement? a. Accounts receivable b. Long-term debt c. Sales d. Inventory
CFAspace. CFA Level II. Provided by APF. Academy of Professional Finance 专 业 金 融 学 院
CFAspace Provided by APF CFA Level II Equity Investments Free Cash Flow Valuation Part I CFA Lecturer: Hillary Wang Content Free cash flow to the firm, free cash flow to equity Ownership perspective implicit
Reporting and Analyzing Cash Flows QUESTIONS
Chapter 12 Reporting and Analyzing Cash Flows QUESTIONS 1. The purpose of the cash flow statement is to report all major cash receipts (inflows) and cash payments (outflows) during a period. It helps users
Bank & Financial Institution Modeling Quick Reference Projecting Financial Statements for a Bank. http://breakingintowallstreet.
Commercial Bank Balance Sheet: Assets: + Cash & Deposits with Banks + Federal Funds Sold + Securities and/or Securities Borrowed + Trading Assets + Gross Loans Allowance for Loan Losses = Net Loans + Accrued
Liquidity analysis: Length of cash cycle
2. Liquidity analysis: Length of cash cycle Operating cycle of a merchandising firm: number of days it takes to sell inventory + number of days until the resulting receivables are converted to cash Acquisition
Learning Objectives: Quick answer key: Question # Multiple Choice True/False. 14.1 Describe the important of accounting and financial information.
0 Learning Objectives: 14.1 Describe the important of accounting and financial information. 14.2 Differentiate between managerial and financial accounting. 14.3 Identify the six steps of the accounting
NWC = current assets - current liabilities = 2,100
Questions and Problems Chapters 2,3 pp45-47 1. Building a balance sheet. Penguin Pucks, Inc., has current assets of $3,000, net fixed assets $6,000, current liabilities of $900, and long-term debt of $5,000.
Total shares at the end of ten years is 100*(1+5%) 10 =162.9.
FCS5510 Sample Homework Problems Unit04 CHAPTER 8 STOCK PROBLEMS 1. An investor buys 100 shares if a $40 stock that pays a annual cash dividend of $2 a share (a 5% dividend yield) and signs up for the
Consolidated Financial Results for Six Months Ended September 30, 2007
Consolidated Financial Results for Six Months Ended September 30, 2007 SOHGO SECURITY SERVICES CO., LTD (URL http://ir.alsok.co.jp/english) (Code No.:2331, TSE 1 st Sec.) Representative: Atsushi Murai,
TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations:
TRANSACTIONS ANALYSIS EXAMPLE Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: 1. Billings to clients for services provided: $350,000
COMPONENTS OF THE STATEMENT OF CASH FLOWS
ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling
CHAPTER 9. Financial Planning and Forecasting Financial Statements
CHAPTER 9 Financial Planning and Forecasting Financial Statements 1 Topics in Chapter Financial planning Additional Funds Needed (AFN) formula Forecasted financial statements Sales forecasts Percent of
Guide to Financial Statements Study Guide
Guide to Financial Statements Study Guide Overview (Topic 1) Three major financial statements: The Income Statement The Balance Sheet The Cash Flow Statement Objectives: Explain the underlying equation
Ch. 3 Financial Statements, Cash Flows & Taxes Financial Statements All businesses should keep careful financial records. 2 Financial Statements However, many businesses do not need to report their financial
Consolidated balance sheet
83 Consolidated balance sheet December 31 Non-current assets Goodwill 14 675.1 978.4 Other intangible assets 14 317.4 303.8 Property, plant, and equipment 15 530.7 492.0 Investment in associates 16 2.5
! "#$ %&!& "& ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& "#$ ) &!&.
! "#!""#$%$#$#$"& $'"()*+,$-).,/ 012! "#$ %&!& "& '!(&)!*&%+,-).//0 -#$#3-4' &,'1$1# $!-!(.//0)& +01+///2 *&& - 3+4 &*!&-.,,5///2!(.//+ &!(!-6%(!(.//.$(!(.//0)& 01,///2 //+2% &*!&- 5,0///2 //32%!(.//+
Analyzing the Statement of Cash Flows
Analyzing the Statement of Cash Flows Operating Activities NACM Upstate New York Credit Conference 2015 By Ron Sereika, CCE,CEW NACM 1 Objectives of this Educational Session u Show how the statement of
Financial. Management FOR A SMALL BUSINESS
Financial Management FOR A SMALL BUSINESS 1 Agenda Welcome, Pre-Test, Agenda, and Learning Objectives Benefits of Financial Management Budgeting Bookkeeping Financial Statements Business Financing Key
MOODY S KMV riskanalyst. Sample Reports MMAS Financial Template and Middle Market Internal Rating Template
MOODY S KMV riskanalyst Sample Reports MMAS Financial Template and Middle Market Internal Rating Template Copyright 2006 Moody s KMV Company. All rights reserved. Moody s KMV, RiskAnalyst, Credit Monitor,
Advanced Placement (AP) Accounting Course & Exam Pilot Program Course Outline, Learning Objectives and Student Outcomes
Advanced Placement (AP) Accounting Course & Exam Pilot Program Course Outline, Learning Objectives and Student Outcomes Course Overview The Advanced Placement (AP) Accounting Course & Exam Pilot Program
Cash is King. cash flow is less likely to be affected
Reading 27: Understanding Cash Flow Statements Relevance of Cash Flow The primary purpose of the statement of cash flows (SCF) is to provide: Info about a firm s cash receipts & cash payments during an
Prospective Analysis REVIEW
Prospective Analysis REVIEW Prospective analysis is the final step in the financial statement analysis process. It includes forecasting of the balance sheet, income statement and statement of cash flows.
rv.wbn.rec.020 Recording entries using company disclosures, determining their financial-statement effects and analyzing related risks (HP)
Revenue and Related Balance Sheet Concepts» What s Behind the numbers» Receivables» Exercises www.navigatingaccounting.com EXERCISES rv.wbn.rec.020 Recording entries using company disclosures, determining
The Nature of Accounting Systems
Basic Accounting & Budgeting February 4, 2009 The Nature of Accounting Systems Accounting is the process of recording, classifying, summarizing, reporting and interpreting information about the economic
Consolidated Balance Sheets
Consolidated Balance Sheets March 31 2015 2014 2015 Assets: Current assets Cash and cash equivalents 726,888 604,571 $ 6,057,400 Marketable securities 19,033 16,635 158,608 Notes and accounts receivable:
Vol. 1, Chapter 7 The Statement of Cash Flows
Vol. 1, Chapter 7 The Statement of Cash Flows Problem 1: Solution Transaction # Identification 1 Operating 2 Investing 3 Noncash transaction 4 Financing 5 Noncash transaction 6 Operating 7 Investing 8
Chapter 4. Long-Term Financial Planning and Growth. Overview of the Lecture. September 2004. What Is Financial Planning. Financial Planning Models
Chapter 4 Long-Term Financial Planning and Growth September 2004 Overview of the Lecture What Is Financial Planning Financial Planning Models The Percentage of Sales Approach xternal Financing and Growth
Chapter 3 Financial Statements, Cash Flow, and Taxes
Chapter 3 Financial Statements, Cash Flow, and Taxes ANSWERS TO END-OF-CHAPTER QUESTIONS 3-1 a. The annual report is a report issued annually by a corporation to its stockholders. It contains basic financial
Vertical and Horizontal Analysis. Financial Analysis. Lecturer: Dr. Constantinos Adamides
Vertical and Horizontal Analysis Financial Analysis Lecturer: Dr. Constantinos Adamides Horizontal Analysis Comparison of financial information of a single company for two more years Examination of absolute
How To Write A Financial Planning Model In European Venture 2015
»venture» 2015 introduction to the financial planning model September 2014 ELEMENTS OF THE ANNUAL ACCOUNTS The financial planning model supports participants in»venture» 2015 in preparing the three main
> DO IT! Chapter 13. Classification of Cash Flows. Cash from Operating Activities D-1. Solution. Action Plan
Chapter 13 > DO IT! Classification of Cash Flows Identify the three types of activities used to report all cash inflows and outflows. Report as operating activities the cash effects of transactions that
Advanced Placement (AP) Accounting
Advanced Placement (AP) Accounting The Advanced Placement (AP) Accounting Course is a full academic year course. The course is based on high school teachers having 120 contact hours with students from
Finance and Accounting For Non-Financial Managers
Finance and Accounting For Non-Financial Managers Accounting/Finance Recording, classifying, and summarizing financial transactions in terms of dollars and their interpretation 1 Key Accounting Terms Accounting
Statement of Cash Flows. Study Objectives
Statement of Cash Flows Study Objectives Indicate the primary purpose of the statement of cash flows. Distinguish among operating, investing, and financing activities. Explain the impact of the product
Advanced Placement (AP) Accounting Course & Exam Pilot Program Course Outline, Learning Objectives and Student Outcomes
Advanced Placement (AP) Accounting Course & Exam Pilot Program Course Outline, Learning Objectives and Student Outcomes Course Overview The Advanced Placement (AP) Accounting Course & Exam Pilot Program
Chapter 17: Financial Statement Analysis
FIN 301 Class Notes Chapter 17: Financial Statement Analysis INTRODUCTION Financial ratio: is a relationship between different accounting items that tells something about the firm s activities. Purpose
Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements
Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements In the United States, businesses generally present financial information in the form of financial statements
Financial Statements Tutorial
Financial Statement Review: Financial Statements Tutorial There are four major financial statements used to communicate information to external users (creditors, investors, suppliers, etc.) - 1. Balance
The Statement of Cash Flows Direct Method
23 The Statement of Cash Flows Direct Method DEMONSTRATION PROBLEM The financial statements of Bolero Corporation follow. Copyright Houghton Mifflin Company. All rights reserved. 1 Bolero Corporation Income
Cash Flow Analysis. 15.511 Corporate Accounting Summer 2004. Professor SP Kothari. Sloan School of Management Massachusetts Institute of Technology
Cash Flow Analysis 15.511 Corporate Accounting Summer 2004 Professor SP Kothari Sloan School of Management Massachusetts Institute of Technology June 16, 2004 1 Statement of Cash Flows Reports operating
Key Concepts and Skills. Standardized Financial. Chapter Outline. Ratio Analysis. Categories of Financial Ratios 1-1. Chapter 3
Key Concepts and Skills Chapter 3 Working With Financial Statements Know how to standardize financial statements for comparison purposes Know how to compute and interpret important financial ratios Know
CHAPTER 21. Working Capital Management
CHAPTER 21 Working Capital Management 1 Topics in Chapter Alternative working capital policies Cash, inventory, and A/R management Accounts payable management Short-term financing policies Bank debt and
Chapter 14. 1 Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall.
Chapter 14 1 Identify the purposes of the statement of cash flows Distinguish among operating, investing, and financing cash flows Prepare the statement of cash flows by the indirect method Identify noncash
A Simple Model. Introduction to Financial Statements
Introduction to Financial Statements NOTES TO ACCOMPANY VIDEOS These notes are intended to supplement the videos on ASimpleModel.com. They are not to be used as stand alone study aids, and are not written
Brief Report on Closing of Accounts (connection) for the Term Ended March 31, 2007
MARUHAN Co., Ltd. Brief Report on Closing of (connection) for the Term Ended March 31, 2007 (Amounts less than 1 million yen omitted) 1.Business Results for the term ended on March, 2007 (From April 1,
Financial Statements and Ratios: Notes
Financial Statements and Ratios: Notes 1. Uses of the income statement for evaluation Investors use the income statement to help judge their return on investment and creditors (lenders) use it to help
11. Long term financial planning and growth (part 2)
1 11. Long term financial planning and growth (part 2) In these slides, we go into more detail on long-term planning. Topics include: Partial capacity and lumpy investment in fixed assets Interest and
UNDERSTANDING FINANCE AND MEMBER EQUITY MY EXPERIENCE AGENDA
UNDERSTANDING FINANCE AND MEMBER EQUITY A Special Presentation for the Strengthening Cooperation Workshop February 21, 2006 by Brian Henehan Senior Extension Associate Cornell Cooperative Enterprise Program
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased.
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold
Forecasting Financial Requirements
CHAPTER OUTLINE Spotlight: Planning for Growth (http://www.builtny.com) 1 The Purpose and Need for Financial Forecasting Describe the purpose and need for financial forecasting. Purpose of pro forma financial
Lecture 5 - Financial Planning and Forecasting
Lecture 5 - Financial Planning and Forecasting Strategy A company s strategy consists of the competitive moves, internal operating approaches, and action plans devised by management to produce successful
Consolidated Financial Results for Fiscal Year 2013 (April 1, 2013 March 31, 2014)
Consolidated Financial Results for Fiscal Year 2013 (April 1, 2013 March 31, 2014) 28/4/2014 Name of registrant: ShinMaywa Industries, Ltd. Stock Exchange Listed: Tokyo Code number: 7224 (URL: http://www.shinmaywa.co.jp
CENTURY 21 ACCOUNTING, 8e General Journal Chapter Objectives
CENTURY 21 ACCOUNTING, 8e General Journal Chapter Objectives Chapter 1 Starting A Proprietorship: Changes that Affect the Accounting Equation After studying Chapter 1, you will be able to: 1. Define accounting
Consolidated Management Indicators
Consolidated Management Indicators Isetan Mitsukoshi Holdings Ltd., Consolidated Subsidiaries and Affiliated Companies Net sales Gross profit Selling, general and administrative expenses Operating income
Comprehensive exam Feb.11
Comprehensive exam Feb.11 1 Objectives of the examination Apply the financial management concept to evaluate the company s performance. Relate the results of the analysis to make financial decisions or
CONSOLIDATED STATEMENT OF INCOME
CONSOLIDATED STATEMENT OF INCOME 4 th quarter (a) 3 rd quarter 4 th quarter 2009 Sales 40,157 40,180 36,228 Excise taxes (4,397) (4,952) (4,933) Revenues from sales 35,760 35,228 31,295 Purchases, net
FSA Note: Summary of Financial Ratio Calculations
FSA Note: Summary of Financial Ratio Calculations This note contains a summary of the more common financial statement ratios. A few points should be noted: Calculations vary in practice; consistency and
Financial Formulas. 5/2000 Chapter 3 Financial Formulas i
Financial Formulas 3 Financial Formulas i In this chapter 1 Formulas Used in Financial Calculations 1 Statements of Changes in Financial Position (Total $) 1 Cash Flow ($ millions) 1 Statements of Changes
Chapter Financial Forecasting
Chapter Financial Forecasting PPT 4-2 Chapter 4 - Outline What is Financial Forecasting? 3 Financial Statements for Forecasting Constructing Pro Forma Statements Basis for Sales Projections Steps in a
CHAPTER 2 INTRODUCTION TO CORPORATE FINANCE
CHAPTER 2 INTRODUCTION TO CORPORATE FINANCE Solutions to Questions and Problems NOTE: All end of chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and
Bonds. Accounting for Long-Term Debt. Agenda Long-Term Debt. 15.501/516 Accounting Spring 2004
Accounting for Long-Term Debt 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology April 5, 2004 1 Agenda Long-Term Debt Extend our
Oklahoma State University Spears School of Business. Financial Statements
Oklahoma State University Spears School of Business Financial Statements Slide 2 Sources of Information Annual reports (10K) & Quarterly reports (10Q) SEC EDGAR Major databases COMPUSTAT(access through
CASH FLOW STATEMENT (AND FINANCIAL STATEMENT)
CASH FLOW STATEMENT (AND FINANCIAL STATEMENT) - At the most fundamental level, firms do two different things: (i) They generate cash (ii) They spend it. Cash is generated by selling a product, an asset
What is Financial Planning
What is Financial Planning Firms must plan for both the short term and the long term. Short-term planning rarely looks further ahead than the next 12 months. It seeks to ensure that the firm has enough