公司理财2 罗斯.pptVIP

Chapter 2Financial Statements and Cash Flows10 September 2012 Key Concepts and Skills Know the difference between book value and market value Know the difference between accounting income and cash flow Know how to determine a firm’s cash flow from its financial statements Chapter Outline The Balance Sheet The Income Statement Cash Flow CHAPTER WEB SITES Balance Sheet The balance sheet is a snapshot of the firm’s assets and liabilities at a given point in time Assets are listed in order of decreasing liquidity Ease of conversion to cash Without significant loss of value Balance Sheet Identity Assets = Liabilities + Stockholders’ Equity The Balance Sheet - Figure 2.1 Net Working Capital and Liquidity Net Working Capital Current Assets – Current Liabilities Positive when the cash that will be received over the next 12 months exceeds the cash that will be paid out Usually positive in a healthy firm Liquidity Ability to convert to cash quickly without a significant loss in value Liquid firms are less likely to experience financial distress But liquid assets earn a lower return Trade-off to find balance between liquid and illiquid assets US Corporation Balance Sheet – Table 2.1 Market Vs. Book Value The balance sheet provides the book value of the assets, liabilities, and equity. Market value is the price at which the assets, liabilities ,or equity can actually be bought or sold. Market value and book value are often very different. Why? Which is more important to the decision-making process? Example 2.2 Klingon Corporation KLINGON CORPORATION Balance Sheets Market Value versus Book Value Book Market Book Market Assets Liabilities and Shareholders’ Equity NWC $ 400 $ 600 LTD $ 500 $ 500 NFA 700 1,000 SE 600 1,100 1,100 1,600 1,100 1,600 Income Statement The income statement is more like a video of the firm’s operations for a specified period of time. You generally report revenues first and then deduct any expenses for the period Matching principle – GAAP sa