武汉大学公司金融课件(六).docVIP

FINANCIAL STATEMENT ANALYSIS FINANCIAL STATEMENTS BALANCE SHEET The b asicbalan ce sheeti dentity(p.23 Ross),namely: As sets = Lia bilities +Sharehold er’s Equit y Assets: w hat a firm owns. Liab ilities: w hat a firm owes Share holder’s e quity: the differenc e between what a fir m owns and what the firm owes. IMPORTANT ELEMENTS TO NOTE LIQU IDITY: DEB Tvs EQUIT Y: MARKET VALUE vs B OOK VALUE: INCOME STATEMENT The INCOME ST ATEMENT re fleets the flow of a ctivity th rough the firm durin g any fisc al period.Financial analysts need to ad apt the in formation contained in the inc ome statem ent to ref leettwov ery import ant differ ences: Cash Flow vers us Accrual Non-cash Items Conso lidated St atements o f Cash Flo wsalong w ith the Ba lance Shee t and the Income Sta tement. CASH FLOW ANALYSIS Our goal, then , is to ta ke the inf ormation i n the fina ncial stat ements and repackage it in a m anner that focuses o n cash flo w. Remembe r, the fun damental g oal is to FOLLOW THE CASH! Cash Flow Cas h flow Cash flow F rom =to + to Assets Bondhol ders Shareholde rs Think about that for a minute: if the net cash generated by all the assets of the firm doesnt flow either to the debt holders or the owners, where would it go. Cash flo w from ass ets can be broken into three components: Operating cash flow: The three items that must be dealt with correctly are: Interest: Depreciation or amortization: Taxes: Capital spending: net capital spending is just the money spent on fixed assets less money received from the sale of fixed assets. But remember, the end period balance has been reduced by the amount of depreciation that was included as an expense in the income statement for that period. That was not a cash outlay! Addit ions to ne t working capital: the net working capital at the end of the period MINUS the net working capital at the beginning of the period. C ash Flow t o Bondhold ers (or cr editors) can also be broken into two portions: The interest paid to the bondhol