财务管理chap2.pptVIP

Chapter 2 Financial Statements, Taxes, and Cash Flow Chapter Outline The Balance Sheet The Income Statement Taxes Cash Flow Key Concepts and Skills Know the difference between book value and market value Know the difference between accounting income and cash flow Know the difference between average and marginal tax rates Know how to determine a firm’s cash flow from its financial statements The 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 Figure 2.1 U.S. Corporation Balance Sheet – Table 2.1 Balance Sheet Analysis When analyzing a balance sheet, the Finance Manager should be aware of three concerns: Accounting liquidity Debt versus equity Value versus cost 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 Creditors generally receive the first claim on the firm’s cash flow. Shareholder’s equity is the residual difference between assets and liabilities. Market vs. Book Value The balance sheet provides the book value of the assets, liabilities, and equity. Historical Cost Principle: 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 which the assets, liabilities, or equity can actually be bought or sold , which is a completely different concept from historical cost. Value versus Cost Market value and book value are often very different. Why? Which is more important to the