ofCashFlows(财务报表分析,加州大学MBA)

OnProjectReport/Readings1.Marketvalue,usenumberofsharesoutstanding,donotuseaveragenumberofsharesoutstanding2.Identifysourceofdataorquotes3.Commonsizeanalysis,showamountsandpercentages4.Onlyanalyzenotesthatarerelatedtoourcurrentlecture5.Taketurntowritethereport,donotleavetooneperson6.Infinalexams,Imayprovideyouwithrawmaterialsandasamplearticlefromourreadingsforyoutoanalyzetherawmaterialsandwriteasimilararticle.Sogetfamiliarwithallarticles.Again,understandbutdonotmemorize.FirmNamesEagleEye:ValuationAnalysisStrategyInvestoriumStatementofCashFlowCashflowfromOperatingactivities:（营运活动）cashreceiptsfromcustomerscashdisbursedto:suppliersofmerchandiseemployeesforsalariesCashflowfrominvestingactivities:（投资活动）purchaseofbuildings,equipments,plantsproceeds(进帐）fromsalesoflongtermassetsCashflowfromfinancingactivities:（融资活动）borrowing/repaylongtermdebtsissuingnewsharesOverviewoftheStatementofCashFlowsInAOL2000balancesheet,cashandcashequivalentincreasedfrom$936millionsto$2,490millions.How?Thestatementofcashflows…(a)explainsthereasonsforachangeincash.(b)classifiesthereasonsforthechangeasanoperating,investingorfinancingactivity.(c)reconcilesnetincomewithcashflowfromoperations.MontgomeryWardb.f.bankruptThedifferencebetweenearningsandcashflows1.I/SExplainchangeinretainedearnings2.I/Sisaccrued-based3.I/Srecognizepropertyrights4.I/Srequireestimates5.I/Sisanopinion6.I/Sisproneto(易于）manipulation7.Firmscansurvivealongstring（长串）ofnegativeearnings1.SCFexplainchangeincashandcashequivalent2.N/A3.SCFemphasize“actualpossessment”4.SCFdoesnot5.SCFisafact6.SCFissotoamuchlessdegree7.Firmsgobankruptwithalongstringofnegativecashflows(outflow)CashflowequationA=L+EΔA=ΔL+ΔEΔcash+Δnon-cashA=ΔL+ΔEΔcash+ΔcurrentA(otherthancash)+Δnon-currentA=ΔcurrentL+Δnon-currentL+ΔEΔcash=ΔcurrentL+Δnon-currentL+ΔE-ΔcurrentA(otherthancash)-Δnon-currentACashflowfromoperationCashflowsrelatedtosellinggoodsandservices;thatis,theprinciplebusiness(主营业务)ofthefirmThemainsourceofpayoffstoshareholdersandcreditorsThereasonforthefirmstoexistIffirmsdonotinthelongrungeneratemorecashfromoperationthanthereturnsoffundstoshareholdersandcreditors,thefirmsgobankruptCashflowfromoperation-componentsCashcollectedfromcustomersCashcollectedasinterest(利息）onloanstoothersCashcollectedasdividends（股利）oninvestmentonotherfirms’stocksCashpaidtosuppliersCashpaidtoemployeesCashpaidtootherserviceproviders:landlords,marketingagency,auditors,consultants,…CashpaidtogovernmentCashpaidtocreditorsasinterestonborrowedmoneyCashflowfrominvestingactivitiesCashflowsrelatedtotheacquisitionorsaleofnon-currentassets:investment,land,property,plants,equipments…Tomaintainthecurrentproductivityoftheoperation,afirmmustreplaceassetsthattheywearout(消耗）Togrowitsoperation,afirmmustacquireadditionalassetsOldassetsmaybesoldastheybecomeobsolete(过时）,orasthefirmchangeproductionInvestingactivitiesthusprovideresourcetogeneratecashflowfromoperationsCashflowfrominvestingactivities-componentsCashreceivedfromsalesofland,investment,property,plantsandequipmentCashpaidtoacquireland,investment,property,plantsandequipmentCashflowfromfinancingactivitiesCashflowsrelatedtolong-termliabilitiesandowners’equityThesourceofcashtobeusedininvestingandoperatingactivitiesTwosources:shareholdersandcreditorsThispartofSCFalsoindicateshowmuchcashthefirmreturnstoitscapitalproviders,i.e.,cashdistributiontoshareholdersandcreditorsNote:short-termliabilitiesgeneratedinoperation,suchasaccountpayable,isnotrelatedtothiscategoryCashflowfromfinancingactivities-componentsCashreceivedfromissuingcorporatedebtsortakinguploansCashreceivedfromissuingcommonsharesorpreferredsharesCashpaidtorepaydebtsorloansCashpaidtorepurchasesharesCashpaidtoshareholdersasdividendsRelationsamongthecashflowsfromthethreecategoriesofactivities1CFfromFin.Act.CFfromInv.ActCFFromOp.Act.FreeCashFlow=Cashflowfromoperatingactivities+CashflowfrominvestingactivitiesIfpositive,normaloperationgeneratesmorecashthatitconsumes,suchasthecaseofastablefirmIfnegative,normaloperationgeneratesinsufficientamountofcashtobeself-sustaining,suchasagrowingfirmTwomethodstopreparetheoperatingportionofSCFDirectmethodofpresentationcalculatescashflowfromoperationsbysubtractingcashdisbursementstosupplies,employees,andothersfromcashreceiptsfromcustomers.Theindirectmethodcalculatescashflowfromoperationsbyadjustingnetincomefornoncashrevenuesandexpenses.Mostfirmspresenttheircashflowsusingtheindirectmethod.SCF-DirectmethodThedirectmethodissimpleandstraight:CashcollectedfromcustomersCashcollectedasinterest(利息）onloanstoothersCashcollectedasdividends（股利）oninvestmentonotherfirms’stocksCashpaidtosuppliersCashpaidtoemployeesCashpaidtootherserviceproviders:landlords,marketingagency,auditors,consultants,…CashpaidtogovernmentCashpaidtocreditorsasinterestonborrowedmoneyIndirectmethodSCFreconcilesnetincomewithcashflowfromoperationΔcash=ΔcurrentL+Δnon-currentL+ΔE-ΔcurrentA(otherthancash)-Δnon-currentAΔcash=[ΔcurrentL-ΔcurrentA(otherthancash)]+[Δnon-currentL+ΔE]–[Δnon-currentA]Op.Fin.Inv.IndirectmethodSCFreconcilesnetincomewithcashflowfromope