第二章 会计报表与现金流量.pptx

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1、2-0Chapter Outline2.1 The Balance Sheet2.2 The Income Statement2.3 Net Working Capital2.4 Financial Cash Flow2.5 Summary and Conclusions2-1Sources of Information2-22.1 The Balance SheetAn accountants snapshot of the firms accounting value as of a particular date.The Balance Sheet Identity is:Equity

2、srStockholdesLiabilitieAssets When analyzing a balance sheet, the financial manager should be aware of three concerns: accounting liquidity, debt versus equity, and value versus cost.2-3The Balance Sheet of the U.S. Composite Corporation(in $ millions)20X2 and 20X1Balance SheetU.S. COMPOSITE CORPORA

3、TIONLiabilities (Debt)Assets20X220X1and Stockholders Equity20X220X1Current assets:Current Liabilities: Cash and equivalents$140$107 Accounts payable$213$197 Accounts receivable294270 Notes payable5053 Inventories269280 Accrued expenses223205 Other5850 Total current liabilities$486$455 Total current

4、assets$761$707Long-term liabilities:Fixed assets: Deferred taxes$117$104 Property, plant, and equipment$1,423$1,274 Long-term debt471458 Less accumulated depreciation-550-460 Total long-term liabilities$588$562 Net property, plant, and equipment873814 Intangible assets and other245221Stockholders eq

5、uity: Total fixed assets$1,118$1,035 Preferred stock$39$39 Common stock ($1 per value)5532 Capital surplus347327 Accumulated retained earnings390347 Less treasury stock-26-20 Total equity$805$725Total assets$1,879$1,742Total liabilities and stockholders equity $1,879$1,742The assets are listed in or

6、der by the length of time it normally would take a firm with ongoing operations to convert them into cash.Clearly, cash is much more liquid than property, plant and equipment.2-4Balance Sheet AnalysisWhen analyzing a balance sheet, the financial manager should be aware of three concerns:1. Accountin

7、g liquidity2. Debt versus equity3. Value versus cost2-5Accounting Liquidity Refers to the ease and quickness with which assets can be converted to cash. Current assets are the most liquid. Some fixed assets are intangible. The more liquid a firms assets, the less likely the firm is to experience pro

8、blems meeting short-term obligations. Liquid assets frequently have lower rates of return than fixed assets.2-6Debt versus Equity Generally, when a firm borrows it gives the bondholders first claim on the firms cash flow. Thus shareholders equity is the residual difference between assets and liabili

9、ties.2-7Value versus Cost Under GAAP audited financial statements of firms in the U.S. carry assets at cost. Market value is a completely different concept.2-82.2 The Income Statement The income statement measures performance over a specific period of time. The accounting definition of income isInco

10、meExpensesRevenue2-9U.S.C.C. Income Statement (in $ millions)20X2Income StatementU.S. COMPOSITE CORPORATIONTotal operating revenuesCost of goods soldSelling, general, and administrative expensesDepreciationOperating incomeOther incomeEarnings before interest and taxesInterest expensePretax incomeTax

11、es Current: $71 Deferred: $13Net income Retained earnings: $43 Dividends: $43The operations section of the income statement reports the firms revenues and expenses from principal operations$2,262- 1,655- 327- 90$19029$219- 49$170- 84$862-10(in $ millions)20X2Income StatementU.S. COMPOSITE CORPORATIO

12、NTotal operating revenues$2,262Cost of goods sold- 1,655Selling, general, and administrative expenses- 327Depreciation- 90Operating income$190Other income29Earnings before interest and taxes$219Interest expense- 49Pretax income$170Taxes- 84 Current: $71 Deferred: $13Net income$86 Retained earnings:

13、$43 Dividends: $43The non-operating section of the income statement includes all financing costs, such as interest expense.U.S.C.C. Income Statement2-11(in $ millions)20X2Income StatementU.S. COMPOSITE CORPORATIONTotal operating revenuesCost of goods soldSelling, general, and administrative expenses

14、DepreciationOperating incomeOther incomeEarnings before interest and taxesInterest expensePretax incomeTaxes Current: $71 Deferred: $13Net income Retained earnings: $43 Dividends: $43Usually a separate section reports as a separate item the amount of taxes levied on income.$2,262- 1,655- 327- 90$190

15、29$219- 49$170- 84$86U.S.C.C. Income Statement2-12(in $ millions)20 x2Income StatementU.S. COMPOSITE CORPORATIONTotal operating revenuesCost of goods soldSelling, general, and administrative expensesDepreciationOperating incomeOther incomeEarnings before interest and taxesInterest expensePretax inco

16、meTaxes Current: $71 Deferred: $13Net income Retained earnings: $43 Dividends: $43Net income is the “bottom line”.$2,262- 1,655- 327- 90$19029$219- 49$170- 84$86U.S.C.C. Income Statement2-13Income Statement AnalysisThere are three things to keep in mind when analyzing an income statement:1. GAAP2. N

17、on Cash Items3. Time and Costs2-14Generally Accepted Accounting Principles1. GAAPThe matching principal of GAAP dictates that revenues be matched with expenses. Thus, income is reported when it is earned, even though no cash flow may have occurred2-15Income Statement Analysis2. Non Cash ItemsDepreci

18、ation is the most apparent. No firm ever writes a check for “depreciation”.Another noncash item is deferred taxes, which does not represent a cash flow.2-16Income Statement Analysis3. Time and CostsIn the short run, certain equipment, resources, and commitments of the firm are fixed, but the firm ca

19、n vary such inputs as labor and raw materials.In the long run, all inputs of production (and hence costs) are variable.Financial accountants do not distinguish between variable costs and fixed costs. Instead, accounting costs usually fit into a classification that distinguishes product costs from pe

20、riod costs.2-172.3 Net Working CapitalNWC is usually growing with the firm. sLiabilitieCurrent - AssetsCurrent Capital gNet Workin2-18The Balance Sheet of the U.S.C.C.(in $ millions)20X2 and 20X1Balance SheetU.S. COMPOSITE CORPORATIONLiabilities (Debt)Assets20X220X1and Stockholders Equity20X220X1Cur

21、rent assets:Current Liabilities: Cash and equivalents$140$107 Accounts payable$213$197 Accounts receivable294270 Notes payable5053 Inventories269280 Accrued expenses223205 Other5850 Total current liabilities$486$455 Total current assets$761$707Long-term liabilities:Fixed assets: Deferred taxes$117$1

22、04 Property, plant, and equipment$1,423$1,274 Long-term debt471458 Less accumulated depreciation-550-460 Total long-term liabilities$588$562 Net property, plant, and equipment873814 Intangible assets and other245221Stockholders equity: Total fixed assets$1,118$1,035 Preferred stock$39$39 Common stoc

23、k ($1 par value)5532 Capital surplus347327 Accumulated retained earnings390347 Less treasury stock-26-20 Total equity$805$725Total assets$1,879$1,742Total liabilities and stockholders equity $1,879$1,742Here we see NWC grow to $275 million in 20X2 from $252 million in 20X1. This increase of $23 mill

24、ion is an investment of the firm.$23 million$275m = $761m- $486m$252m = $707- $4552-192.4 Financial Cash Flow In finance, the most important item that can be extracted from financial statements is the actual cash flow of the firm. Since there is no magic in finance, it must be the case that the cash

25、 from received from the firms assets must equal the cash flows to the firms creditors and stockholders.)()()(SCFBCFACF2-20Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperating cash flow$238 (Earnings before interest and taxe

26、s plus depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term debt financing)Equity6 (Dividends plus repurchase of

27、equity minus new equity financing) Total$42Operating Cash Flow:EBIT$219Depreciation $90Current Taxes ($71)OCF$2382-21Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperating cash flow$238 (Earnings before interest and taxes plu

28、s depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term debt financing)Equity6 (Dividends plus repurchase of equit

29、y minus new equity financing) Total$42Capital SpendingPurchase of fixed assets $198Sales of fixed assets (25)Capital Spending $1732-22Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperating cash flow$238 (Earnings before inter

30、est and taxes plus depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term debt financing)Equity6 (Dividends plus re

31、purchase of equity minus new equity financing) Total$42NWC grew from $275 million in 20X2 from $252 million in 20X1.This increase of $23 million is the addition to NWC.2-23Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperatin

32、g cash flow$238 (Earnings before interest and taxes plus depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term deb

33、t financing)Equity6 (Dividends plus repurchase of equity minus new equity financing) Total$422-24Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperating cash flow$238 (Earnings before interest and taxes plus depreciation minus

34、 taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term debt financing)Equity6 (Dividends plus repurchase of equity minus new equity f

35、inancing) Total$42Cash Flow to CreditorsInterest$49Retirement of debt 73Debt service122Proceeds from new debt sales (86)Total362-25Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the FirmOperating cash flow$238 (Earnings before interest

36、 and taxes plus depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-term debt financing)Equity6 (Dividends plus repur

37、chase of equity minus new equity financing) Total$42Cash Flow to StockholdersDividends $43Repurchase of stock 6Cash to Stockholders 49Proceeds from new stock issue (43)Total $62-26Financial Cash Flow of the U.S.C.C.(in $ millions)20X2Financial Cash FlowU.S. COMPOSITE CORPORATIONCash Flow of the Firm

38、Operating cash flow$238 (Earnings before interest and taxes plus depreciation minus taxes)Capital spending-173 (Acquisitions of fixed assets minus sales of fixed assets)Additions to net working capital-23 Total$42Cash Flow of Investors in the FirmDebt$36 (Interest plus retirement of debt minus long-

39、term debt financing)Equity6 (Dividends plus repurchase of equity minus new equity financing) Total$42)()()(SCFBCFACFThe cash from received from the firms assets must equal the cash flows to the firms creditors and stockholders:2-272.5 Summary and Conclusions Financial statements provide important information regarding the value of the firm. You should keep in mind: Measures of profitability do not take risk or timing of cash flows into account. Financial ratios are linked to one another.