公司理财(罗斯)第2章(英文).ppt

2-* 7. In 2004, TimeNow Corporation had current assets of $260 and current liabilities of $180. In 2003, current assets were $220 and current liabilities were $160. What was the change in net working capital for TimeNow in 2004? A) $20 B) $60 C) $80 D) $160 E) None of the above. 2-* Answer: A Rationale: Net working capital in 2004 = $260-$180 = $80 Net working capital in 2003 = $220-$160 = $60 Change in NWC = $80 - $60 = $20 2-* 2.4 Financial Cash Flow In finance, the most important item that can be extracted 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 firm’s assets must equal the cash flows to the firm’s creditors and stockholders. CF(A)≡ CF(B) + CF(S) 2-* Financial 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 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 Operating Cash Flow: EBIT $219 Depreciation $90 Current Taxes ($71) OCF $238 0R:OCF=Net income + Depreciation + Interest expense +Deferred taxes 2-* Financial 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 (Acquisitions of fixed assets minus sales of fixed assets) Additions to net working capital Total Cash Flow of Investors in the Firm Debt (Interest plus retirement of debt minus long-term debt financing) Eq