公司理财第2章

ConceptQuestions◆Whatisthebalance-sheetequation?Assets=Liabilities+Stockholders'equity◆Whatthreethingsshouldbekeptinmindwhenlookingatabalancesheet?Accountingliquidity,debtvs.equity,andvaluevs.cost.◆Whatistheincomestatementequation?Revenue-expenses=Income◆Whatarethethreethingstokeepinmindwhenlookingatanincomestatement?GenerallyAcceptedAccountingPrinciples(GAAP),noncashitems,andtimeandcosts.◆Whatarenoncashexpenses?Noncashexpensesareitemsincludedasexpensesbutwhichdonotdirectlyaffectcashflow.Themostimportantoneisdepreciation.◆Whatisnetworkingcapital?Itisthedifferencebetweencurrentassetsandcurrentliabilities.◆Whatisthechangeinnetworkingcapital?Todeterminechangesinnetworkingcapitalyousubtractusesofnetworkingcapitalfromsourcesofnetworkingcapital.◆Howiscashflowdifferentfromchangesinnetworkingcapital?Thedifferencebetweencashflowandchangesinnewworkingcapitalisthatsometransactionsaffectcashflowandnotnetworkingcapital.Theacquisitionofinventorieswithcashisagoodexampleofachangeinworkingcapitalrequirements.◆Whatisthedifferencebetweenoperatingcashflowandtotalcashflowofthefirm?Themaindifferencebetweenthetwoiscapitalspendingandadditionstoworkingcapital,thatis,investmentinfixedassetsandinvestmentinworkingcapital.QuestionsAndProblemsTheBalanceSheet1PrepareaDecember31balancesheetusingthefollowingdata:Cash$4,000Patents82,000Accountspayable6,000Accountsreceivable8,000Taxespayable2,000Machinery34,000Bondspayable7,000Accumulatedretainedearnings6,000Capitalsurplus19,000Theparvalueofthefirm’scommonstockis$100.1AssetsCurrentassetsCash$4,000Accountsreceivable8,000Totalcurrentassets$12,000FixedassetsMachinery$34,000Patents82,000Totalfixedassets$116,000Totalassets$128,000LiabilitiesandequityCurrentliabilitiesAccountspayable$6,000Taxespayable2,000Totalcurrentliabilities$8,000Long-termliabilitiesBondspayable$7,000StockholdersequityCommonstock($100par)$88,000Capitalsurplus19,000Retainedearnings6,000Totalstockholdersequity$113,000Totalliabilitiesandequity$128,0002Thefollowingtablepresentsthelong-termliabilitiesandstockholders’equityofInformationControlCorp.ofoneyearago.Long-termdebt$50,000,000Preferredstock30,000,000Commonstock100,000,000Retainedearnings20,000,000Duringthepastyear,InformationControlissued$10millionofnewcommonstock.Thefirmgenerated$5millionofnetincomeandpaid$3millionofdividends.Constructtoday’sbalancesheetreflectingthechangesthatoccurredatInformationControlCorp.duringtheyear.TheIncomeStatement2OneyearagoTodayLong-termdebt$50,000,000$50,000,000Preferredstock30,000,00030,000,000Commonstock100,000,000110,000,000Retainedearnings20,000,00022,000,000Total$200,000,000$212,000,0003Prepareanincomestatementusingthefollowingdata.Sales$500,000Costofgoodssold200,000Administrativeexpenses100,000Interestexpense50,000Thefirm’staxrateis34percent.3IncomeStatementTotaloperatingrevenues$500,000Less:Costofgoodssold$200,000Administrativeexpenses100,000300,000Earningsbeforeinterestandtaxes$200,000Less:Interestexpense50,000EarningsbeforeTaxes$150,000Taxes51,000Netincome$99,0004TheFlyingLionCorporationreportedthefollowingdataontheincomestatementofoneofitsdivisions.FlyingLionCorporationhasotherprofitabledivisions.20X220X1Netsales$800,000$500,000Costofgoodssold560,000320,000Operatingexpenses75,00056,000Depreciation300,000200,000Taxrate(%)3030a.Prepareanincomestatementforeachyear.b.Determinetheoperatingcashflowduringeachyear.FinancialCashFlow4a.IncomeStatementTheFlyingLionCorporation19X119X2Netsales$800,000$500,000Costofgoodssold(560,000)(320,000)Operatingexpenses(75,000)(56,000)Depreciation(300,000)(200,000)Earningsbeforetaxes$(135,000)$(76,000)Taxes*40,50022,800Netincome$(94,500)$(53,200)*TheproblemstatesthatFlyingLionhasotherprofitableoperations.FlyingLioncantakeadvantageoftaxlossesbydeductingthetaxliabilitiesintheotheroperationsthathavetaxableprofits.IfFlyingLiondidnothaveotheroperationsandtaxlossescouldnotbecarriedforwardorbackward,thentaxesineachoftheseyearswouldhavebeenzero.b.Cashflowduring19X2=-$94,500+$300,000=$205,500Cashflowduring19X1=-$53,200+$200,000=$146,8005Whatarethedifferencesbetweenaccountingprofitandcashflow?5Themaindifferencebetweenaccountingprofitandcashflowisthatnon-cashcosts,suchasdepreciationexpense,areincludedinaccountingprofits.Cashflowsdonotconsidercoststhatdonotrepresentactualexpenditures.Cashflowsdeducttheentirecostofaninvestmentatthetimethecashflowoccurs.6During1998,theSenbetDiscountTireCompanyhadgrosssalesof$1million.Thefirm’scostofgoodssoldandsellingexpenseswere$300,000and$200,000,respectively.Thesefiguresdonotincludedepreciation.Senbetalsohadnotespayableof$1million.Thesenotescarriedaninterestrateof10percent.Depreciationwas$100,000.Senbet’staxratein1998was35percent.a.WhatwasSenbet’snetoperatingincome?b.Whatwerethefirm’searningsbeforetaxes?c.WhatwasSenbet’snetincome?d.WhatwasSenbet’soperatingcashflow?6a.Netoperatingincome=Sales-Costofgoodssold-Sellingexpenses-Depreciation=$1,000,000-$300,000-$200,000-$100,000=$400,000b.Earningsbeforetaxes=Netoperatingincome-Interestexpense=$400,000-0.1($1,000,000)=$300,000c.Netincome=Earni