《财务英语Chap002》.ppt

Financial Statements and Cash Flow Key Concepts and Skills Understand the information provided by financial statements Differentiate between book and market values Know the difference between accounting income and cash flow Calculate a firm’s cash flow Chapter Outline 2.1 The Balance Sheet 2.2 The Income Statement 2.3 Net Working Capital 2.4 Financial Cash Flow Sources of Information Annual reports Wall Street Journal Internet NYSE () NASDAQ () 2.1 The Balance Sheet U.S. Composite Corporation Balance Sheet U.S. Composite Corporation Balance Sheet U.S. Composite Corporation Balance Sheet Balance Sheet Analysis When analyzing a balance sheet, the Finance Manager should be aware of three concerns: Accounting liquidity(会计流动性） Debt versus equity（负债与权益） Value versus cost（市价与成本） Accounting Liquidity Refers to the ease and quickness with which assets can be converted to cash—without a significant loss in value Current assets are the most liquid. Some fixed assets are intangible. The more liquid a firm’s assets, the less likely the firm is to experience problems meeting short-term obligations. Liquid assets frequently have lower rates of return than fixed assets. Debt versus Equity Liabilities are obligations of the firm that require a payout of cash within a stipulated time period. Stockholders’ equity is a claim against the firm’s assets that is residual and not fixed. In general terms, when the firm borrows, it gives the bondholders first claim on the firm’s cash flow. Bondholders can sue the firm if the firm defaults on its bond contracts. This may lead the firm to declare itself bankrupt. Shareholder’s equity is the residual difference between assets and liabilities. Value versus Cost（市价与成本） The accounting value of a firm’s assets is frequently referred to as the carrying value or the book value of the assets. Under Generally Accepted Accounting Principles (GAAP), audited financial statements of firms in the U.S. carry assets at cost. Market value is the price at wh