罗斯公司理财英文第九版Chap002

FinancialStatementsandCashFlowChapter2Copyright©2010bytheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/Irwin2-1KeyConceptsandSkillsUnderstandtheinformationprovidedbyfinancialstatementsDifferentiatebetweenbookandmarketvaluesKnowthedifferencebetweenaverageandmarginaltaxratesKnowthedifferencebetweenaccountingincomeandcashflowCalculateafirm’scashflow2-2ChapterOutline2.1TheBalanceSheet2.2TheIncomeStatement2.3Taxes2.4NetWorkingCapital2.5FinancialCashFlow2.6TheAccountingStatementofCashFlows2.7CashFlowManagement2-3SourcesofInformationAnnualreportsWallStreetJournalInternetNYSE()NASDAQ()Textbook()SECEDGAR10K&10Qreports2-42.1TheBalanceSheetAnaccountant’ssnapshotofthefirm’saccountingvalueataspecificpointintimeTheBalanceSheetIdentityis:Assets≡Liabilities+Stockholder’sEquity2-5U.S.CompositeCorporationBalanceSheet2010200920102009Currentassets:CurrentLiabilities:Cashandequivalents$140$107Accountspayable$213$197Accountsreceivable294270Notespayable5053Inventories269280Accruedexpenses223205Other5850Totalcurrentliabilities$486$455Totalcurrentassets$761$707Long-termliabilities:Fixedassets:Deferredtaxes$117$104Property,plant,andequipment$1,423$1,274Long-termdebt471458Lessaccumulateddepreciation(550)(460)Totallong-termliabilities$588$562Netproperty,plant,andequipment873814Intangibleassetsandother245221Stockholder'sequity:Totalfixedassets$1,118$1,035Preferredstock$39$39Commonstock($1parvalue)5532Capitalsurplus347327Accumulatedretainedearnings390347Lesstreasurystock(26)(20)Totalequity$805$725Totalassets$1,879$1,742Totalliabilitiesandstockholder'sequity$1,879$1,742Theassetsarelistedinorderbythelengthoftimeitwouldnormallytakeafirmwithongoingoperationstoconvertthemintocash.Clearly,cashismuchmoreliquidthanproperty,plant,andequipment.2-6BalanceSheetAnalysisWhenanalyzingabalancesheet,theFinanceManagershouldbeawareofthreeconcerns:1.Liquidity2.Debtversusequity3.Valueversuscost2-7LiquidityReferstotheeaseandquicknesswithwhichassetscanbeconvertedtocash—withoutasignificantlossinvalueCurrentassetsarethemostliquid.Somefixedassetsareintangible.Themoreliquidafirm’sassets,thelesslikelythefirmistoexperienceproblemsmeetingshort-termobligations.Liquidassetsfrequentlyhavelowerratesofreturnthanfixedassets.2-8DebtversusEquityCreditorsgenerallyreceivethefirstclaimonthefirm’scashflow.Shareholder’sequityistheresidualdifferencebetweenassetsandliabilities.2-9ValueversusCostUnderGenerallyAcceptedAccountingPrinciples(GAAP),auditedfinancialstatementsoffirmsintheU.S.carryassetsatcost.Marketvalueisthepriceatwhichtheassets,liabilities,andequitycouldactuallybeboughtorsold,whichisacompletelydifferentconceptfromhistoricalcost.2-102.2TheIncomeStatementMeasuresfinancialperformanceoveraspecificperiodoftimeTheaccountingdefinitionofincomeis:Revenue–Expenses≡Income2-11U.S.C.C.IncomeStatementTotaloperatingrevenuesCostofgoodssoldSelling,general,andadministrativeexpensesDepreciationOperatingincomeOtherincomeEarningsbeforeinterestandtaxesInterestexpensePretaxincomeTaxesCurrent:$71Deferred:$13NetincomeAdditiontoretainedearnings$43Dividends:$43Theoperationssectionoftheincomestatementreportsthefirm’srevenuesandexpensesfromprincipaloperations.$2,2621,65532790$19029$21949$17084$862-12Totaloperatingrevenues$2,262Costofgoodssold1,655Selling,general,andadministrativeexpenses327Depreciation90Operatingincome$190Otherincome29Earningsbeforeinterestandtaxes$219Interestexpense49Pretaxincome$170Taxes84Current:$71Deferred:$13Netincome$86Additiontoretainedearnings:$43Dividends:$43Thenon-operatingsectionoftheincomestatementincludesallfinancingcosts,suchasinterestexpense.U.S.C.C.IncomeStatement2-13TotaloperatingrevenuesCostofgoodssoldSelling,general,andadministrativeexpensesDepreciationOperatingincomeOtherincomeEarningsbeforeinterestandtaxesInterestexpensePretaxincomeTaxesCurrent:$71Deferred:$13NetincomeAdditiontoretainedearnings:$43Dividends:$43Usuallyaseparatesectionreportstheamountoftaxesleviedonincome.$2,2621,65532790$19029$21949$17084$86U.S.C.C.IncomeStatement2-14TotaloperatingrevenuesCostofgoodssoldSelling,general,andadministrativeexpensesDepreciationOperatingincomeOtherincomeEarningsbeforeinterestandtaxesInterestexpensePretaxincomeTaxesCurrent:$71Deferred:$13NetincomeRetainedearnings:$43Dividends:$43Netincomeisthe“bottomline.”$2,2621,65532790$19029$21949$17084$86U.S.C.C.IncomeStatement2-15IncomeStatementAnalysisTherearethreethingstokeepinmindwhenanalyzinganincomestatement:1.GenerallyAcceptedAccountingPrinciples(GAAP)2.Non-CashItems3.TimeandCosts2-16GAAPThematchingprincipleofGAAPdictatesthatrevenuesbematchedwithexpenses.Thus,incomeisreportedwhenitisearned,eventhoughnocashflowmayhaveoccurred.2-17Non-CashItemsDepreciationisthemostapparent.Nofirmeverwritesacheckfor“depreciation.”Anothernon-cashitemisdeferredtaxes,whichdoesnotrepresentacashflow.Thus,netincomeisnotcash.2-18TimeandCostsIntheshort-run,certainequipment,resources,andcommitmentsofthefirmarefixed,butthefirmcanvarysuchinputsaslaborandrawmaterials.Inthelo