第二章会计报表与现金流量.ppt

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1、Chapter Outline,2.1 The Balance Sheet2.2 The Income Statement2.3 Net Working Capital2.4 Financial Cash Flow2.5 Summary and Conclusions,Sources of Information,Annual reportsWall Street JournalInternetNYSE()Nasdaq()Text(&10Q reports,2.1 The Balance Sheet,An accountants snapshot of the firms accounting

2、 value as of a particular date.The Balance Sheet Identity is:,When analyzing a balance sheet,the financial manager should be aware of three concerns:accounting liquidity,debt versus equity,and value versus cost.,The Balance Sheet of the U.S.Composite Corporation,Liabilities(Debt),Assets,20X2,20X1,an

3、d Stockholders Equity,20X2,20X1,Current assets:,Current Liabilities:,Cash and equivalents,$140,$107,Accounts payable,$213,$197,Accounts receivable,294,270,Notes payable,50,53,Inventories,269,280,Accrued expenses,223,205,Other,58,50,Total current liabilities,$486,$455,Total current assets,$761,$707,L

4、ong-term liabilities:,Fixed assets:,Deferred taxes,$117,$104,Property,plant,and equipment,$1,423,$1,274,Long-term debt,471,458,Less accumulated depreciation,-550,-460,Total long-term liabilities,$588,$562,Net property,plant,and equipment,873,814,Intangible assets and other,245,221,Stockholders equit

5、y:,Total fixed assets,$1,118,$1,035,Preferred stock,$39,$39,Common stock($1 per value),55,32,Capital surplus,347,327,Accumulated retained earnings,390,347,Less treasury stock,-26,-20,Total equity,$805,$725,Total assets,$1,879,$1,742,Total liabilities and stockholders equity,$1,879,$1,742,The assets

6、are listed in order 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.,Balance Sheet Analysis,When analyzing a balance sheet,the financial manager should be aware of three concerns:

7、Accounting liquidityDebt versus equityValue versus cost,Accounting 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 proble

8、ms meeting short-term obligations.Liquid assets frequently have lower rates of return than fixed assets.,Debt 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 liabilities.,Va

9、lue versus Cost,Under GAAP audited financial statements of firms in the U.S.carry assets at cost.Market value is a completely different concept.,2.2 The Income Statement,The income statement measures performance over a specific period of time.The accounting definition of income is,U.S.C.C.Income Sta

10、tement,(in$millions),20X2,Income Statement,U.S.COMPOSITE CORPORATION,Total operating revenues,Cost of goods sold,Selling,general,and administrative expenses,Depreciation,Operating income,Other income,Earnings before interest and taxes,Interest expense,Pretax income,Taxes,Current:$71,Deferred:$13,Net

11、 income,Retained earnings:$43,Dividends:$43,The operations section of the income statement reports the firms revenues and expenses from principal operations,$2,262,-1,655,-327,-90,$190,29,$219,-49,$170,-84,$86,(in$millions),20X2,Income Statement,U.S.COMPOSITE CORPORATION,Total operating revenues,$2,

12、262,Cost of goods sold,-1,655,Selling,general,and administrative expenses,-327,Depreciation,-90,Operating income,$190,Other income,29,Earnings before interest and taxes,$219,Interest expense,-49,Pretax income,$170,Taxes,-84,Current:$71,Deferred:$13,Net income,$86,Retained earnings:$43,Dividends:$43,

13、The non-operating section of the income statement includes all financing costs,such as interest expense.,U.S.C.C.Income Statement,(in$millions),20X2,Income Statement,U.S.COMPOSITE CORPORATION,Total operating revenues,Cost of goods sold,Selling,general,and administrative expenses,Depreciation,Operati

14、ng income,Other income,Earnings before interest and taxes,Interest expense,Pretax income,Taxes,Current:$71,Deferred:$13,Net income,Retained earnings:$43,Dividends:$43,Usually a separate section reports as a separate item the amount of taxes levied on income.,$2,262,-1,655,-327,-90,$190,29,$219,-49,$

15、170,-84,$86,U.S.C.C.Income Statement,(in$millions),20 x2,Income Statement,U.S.COMPOSITE CORPORATION,Total operating revenues,Cost of goods sold,Selling,general,and administrative expenses,Depreciation,Operating income,Other income,Earnings before interest and taxes,Interest expense,Pretax income,Tax

16、es,Current:$71,Deferred:$13,Net income,Retained earnings:$43,Dividends:$43,Net income is the“bottom line”.,$2,262,-1,655,-327,-90,$190,29,$219,-49,$170,-84,$86,U.S.C.C.Income Statement,Income Statement Analysis,There are three things to keep in mind when analyzing an income statement:GAAPNon Cash It

17、emsTime and Costs,Generally Accepted Accounting Principles,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 occurred,Income Statement Analysis,Non Cash ItemsDepreciation is the most apparent

18、.No firm ever writes a check for“depreciation”.Another noncash item is deferred taxes,which does not represent a cash flow.,Income Statement Analysis,Time and CostsIn the short run,certain equipment,resources,and commitments of the firm are fixed,but the firm can vary such inputs as labor and raw ma

19、terials.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 period costs.,2.3 Net Working Capital,NWC is

20、usually growing with the firm.,The Balance Sheet of the U.S.C.C.,Liabilities(Debt),Assets,20X2,20X1,and Stockholders Equity,20X2,20X1,Current assets:,Current Liabilities:,Cash and equivalents,$140,$107,Accounts payable,$213,$197,Accounts receivable,294,270,Notes payable,50,53,Inventories,269,280,Acc

21、rued expenses,223,205,Other,58,50,Total current liabilities,$486,$455,Total current assets,$761,$707,Long-term liabilities:,Fixed assets:,Deferred taxes,$117,$104,Property,plant,and equipment,$1,423,$1,274,Long-term debt,471,458,Less accumulated depreciation,-550,-460,Total long-term liabilities,$58

22、8,$562,Net property,plant,and equipment,873,814,Intangible assets and other,245,221,Stockholders equity:,Total fixed assets,$1,118,$1,035,Preferred stock,$39,$39,Common stock($1 par value),55,32,Capital surplus,347,327,Accumulated retained earnings,390,347,Less treasury stock,-26,-20,Total equity,$8

23、05,$725,Total assets,$1,879,$1,742,Total liabilities and stockholders equity,$1,879,$1,742,Here we see NWC grow to$275 million in 20X2 from$252 million in 20X1.,This increase of$23 million is an investment of the firm.,2.4 Financial Cash Flow,In finance,the most important item that can be extracted

24、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 from received from the firms assets must equal the cash flows to the firms creditors and stockholders.,Financial Cash Flow of the U.S.C.C.,Cash Flow of the Firm,Operatin

25、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,$42,Cash Flow of Investors in the Firm,Debt,$36,(Interest plus retirement of debt,minus long

26、-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,Operating Cash Flow:EBIT$219Depreciation$90Current Taxes($71)OCF$238,Financial Cash Flow of the U.S.C.C.,(in$millions),20X2,Financial Cash Flow,U.S.COMPOSITE CORPORATION,Cash Flow of the Firm,Op

27、erating 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,$42,Cash Flow of Investors in the Firm,Debt,$36,(Interest plus retirement of debt,minu

28、s long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,Capital SpendingPurchase of fixed assets$198Sales of fixed assets(25)Capital Spending$173,Financial Cash Flow of the U.S.C.C.,(in$millions),20X2,Financial Cash Flow,U.S.COMPOSITE CORPORATI

29、ON,Cash Flow of the Firm,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,$42,Cash Flow of Investors in the Firm,Debt,$36,(Interest p

30、lus retirement of debt,minus long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,NWC grew from$275 million in 20X2 from$252 million in 20X1.This increase of$23 million is the addition to NWC.,Financial Cash Flow of the U.S.C.C.,(in$millions),

31、20X2,Financial Cash Flow,U.S.COMPOSITE CORPORATION,Cash Flow of the Firm,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,$42,Cash Fl

32、ow of Investors in the Firm,Debt,$36,(Interest plus retirement of debt,minus long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,Financial Cash Flow of the U.S.C.C.,(in$millions),20X2,Financial Cash Flow,U.S.COMPOSITE CORPORATION,Cash Flow of

33、 the Firm,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,$42,Cash Flow of Investors in the Firm,Debt,$36,(Interest plus retirement

34、of debt,minus long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,Cash Flow to CreditorsInterest$49Retirement of debt 73Debt service122Proceeds from new debt sales(86)Total36,Financial Cash Flow of the U.S.C.C.,(in$millions),20X2,Financial Ca

35、sh Flow,U.S.COMPOSITE CORPORATION,Cash Flow of the Firm,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,$42,Cash Flow of Investors i

36、n the Firm,Debt,$36,(Interest plus retirement of debt,minus long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,Cash Flow to StockholdersDividends$43Repurchase of stock 6Cash to Stockholders 49Proceeds from new stock issue(43)Total$6,Financia

37、l Cash Flow of the U.S.C.C.,(in$millions),20X2,Financial Cash Flow,U.S.COMPOSITE CORPORATION,Cash Flow of the Firm,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

38、 net working capital,-23,Total,$42,Cash Flow of Investors in the Firm,Debt,$36,(Interest plus retirement of debt,minus long-term debt financing),Equity,6,(Dividends plus repurchase of,equity minus new equity financing),Total,$42,The cash from received from the firms assets must equal the cash flows

39、to the firms creditors and stockholders:,2.5 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.,