Chap002-PPT-财务管理第二章-对会计与财务的回顾.ppt

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1、2-2Chapter Outline Income Statement Price-earnings Ratio Balance Sheet Statement of Cash Flows Tax-free Investments (Deprecation)2-3Basic Financial Statements Income Statement Balance Sheet Statement of Cash Flows2-4Income Statement Device to measure the profitability of a firm over a period of time

2、 It covers a defined period of time It is presented in a stair-step or progressive fashion to examine profit or loss after each type of expense item is deducted2-5Income Statement (contd)Sales Cost of Goods Sold (COGS) = Gross Profit (GP)GP Expenses = Earnings Before Interest and Taxes (EBIT) or Ope

3、rating Income (OI)EBIT Interest = Earnings Before Taxes (EBT)EBT Taxes = Earnings After Taxes (EAT) or Net Income (NI)2-6Income Statement (contd)2-7Return to Capital Three primary sources of capital: Bondholders Preferred stockholders Common stockholders Earnings per share Interpreted in terms of nu

4、mber of outstanding shares May be paid out in dividends or retained by company for subsequent reinvestment Statement of retained earnings Indicates disposition of earnings2-8Statement of Retained Earnings2-9Price-Earnings (P/E) Ratio Multiplier applied to earnings per share to determine current valu

5、e of common stock Some factors that influence P/E: Earnings and sales growth of the firm Risk (volatility in performance) Debt-equity structure of the firm Dividend payment policy Quality of management2-10Price-Earnings (P/E) Ratio (contd) Allows comparison of the relative market value of many compa

6、nies based on $1 of earnings per share Indicates expectations about the future of a company Price-earnings ratios can be confusing2-11Price-earnings Ratios for Selected US Companies2-12Limitations of the Income Statement Income gained/lost during a given period is a function of verifiable transactio

7、ns Stockholders, hence, may perceive only a much smaller gain/loss from actual day-to-day operations Flexibility in reporting transactions might result in differing measurements of income gained from similar events at the end of a time period2-13Balance Sheet Indicates what the firm owns and how the

8、se assets are financed in the form of liabilities or ownership interest Delineates the firms holdings and obligations Items are stated on an original cost basis rather than at current market value2-14Balance Sheet Items Liquidity: Asset accounts are listed in order of liquidity Current assets Items

9、that can be converted to cash within 12 months Marketable securities Temporary investments of excess cash Accounts receivable Allowance for bad debts to determine their anticipated collection value Inventory Includes raw materials, goods in progress, or finished goods2-15Balance Sheet Items (contd)

10、Prepaid expenses Represent future expense items that are already paid for Investments Long-term commitment of funds Includes stocks, bonds, or investments in other companies Plant and equipment Carried at original cost minus accumulated depreciation Accumulated depreciation Sum of past and present d

11、epreciation charges on currently owned assets2-16Balance Sheet Items (contd) Depreciation expense is the current years charge Total assets: Financed through liabilities or stockholders equity Short-term obligations Accounts payable Notes payable Accrued expense2-17Stockholders Equity Represents tota

12、l contribution and ownership interest of preferred and common stockholders Preferred stock Common stock Capital paid in excess of par Retained earnings2-18Statement of Financial Position (Balance Sheet)2-19Concept of Net Worth Net worth/book value = Stockholders equity preferred stock component Mark

13、et value is of primary concern to the: Financial manager Security analyst Stockholders2-20Limitations of the Balance Sheet Most of the values are based on historical/original cost price Troublesome when it comes to plant and equipment inventory FASB ruling on disclosure of inflation adjustments no l

14、onger in force It is purely a voluntary act on the part of the company2-21Limitations of the Balance Sheet (contd) Differences between per share values may be due to: Asset valuation Industry outlook Growth prospects Quality of management Risk-return expectations2-22Comparison of Market Valueto Book

15、 Value per Share2-23Statement of Cash Flows Emphasizes critical nature of cash flow to the operations of the firm It represents cash/cash equivalents items easily convertible to cash within 90 days Cash flow analysis helps in combating discrepancies faced through accrual method of accounting2-24Stat

16、ement of Cash Flows (contd) Advantage of accrual method Allows matching of revenues and expenses in the period in which they occur to appropriately measure profits Disadvantage of accrual method Adequate attention not directed to actual cash flow position of firm2-25Concepts Behind the Statement of

17、Cash Flows2-26Determining Cash Flows from Operating Activities Translation of income from operations from an accrual to a cash basis Direct method Every item on the income statement is adjusted from accrual to cash accounting Indirect method Net income represents the starting point Required adjustme

18、nts are made to convert net income to cash flows from operations2-27Indirect Method2-28Comparative Balance Sheets2-29Cash Flows from Operating Activities2-30Determining Cash Flows from Investing Activities Investing activities: Long-term investment activities in mainly plant and equipment Increasing

19、 investments represent a use of funds Decreasing investments represent a source of funds 2-31Determining Cash Flows from Financing Activities Financial activities apply to the sale/retirement of: Bonds Common stock Preferred stock Other corporate securities Payment of cash dividends Sale of firms se

20、curities is a source of funds Payment of dividends and repurchase of securities is a use of funds2-32Overall Statement Combining the Three Sections2-33Analysis of the Overall Statement How are increases in long-term assets being financed? Preferably, adequate long-term financing and profits should e

21、xist Short-term funds may be used to carry long-term needs could be a potential high-risk situation Example: trade credit and bank loans2-34Depreciation and Funds Flow Depreciation Attempt to allocate the initial cost of an asset over its useful life Charging of depreciation does not directly influe

22、nce the movement of funds2-35Comparison of Accounting and Cash Flows2-36Free Cash FlowFree Cash Flow = Cash flow from operating activities Capital expenditures Dividends Capital expenditures Maintain productive capacity of firm Dividends Maintain necessary payout on common stock and to cover any pre

23、ferred stock obligations Free cash flow is used for special financing activities Example: leveraged buyouts2-37Income Tax Considerations Corporate tax rates Progressive: the top rate is 40% including state and foreign taxes if applicable. The lower bracket is 1520% Cost of a tax-deductible expense2-

24、38Depreciation as a Tax Shield Not a new source of fund Provides tax shield benefits measurable as depreciation times the tax rateCorporation ACorporation BEarnings before depreciation and taxes$400,000$400,000Depreciation 100,000 0 _ _ Earnings before taxed 300,000 400,000Taxes (40%) 120,000 160,000 _ _ Earnings after taxes 180,000 240,000+Depreciation charged without cash outlay 100,000 0 _ _ Cash flow $280,000 $240,000Difference$40,000