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Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
Revenue
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Financing Costs
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
GROSS PROFIT
- Operating Expenses OPERATING INCOME (EBIT) - Interest Expense EARNINGS BEFORE TAXES (EBT) - Income Taxes EARNINGS AFTER TAXES (EAT) - Preferred Stock Dividends
Income Statement
GROSS PROFIT
- Operating Expenses OPERATING INCOME (EBIT) - Interest Expense EARNINGS BEFORE TAXES (EBT) - Income Taxes EARNINGS AFTER TAXES (EAT) - Preferred Stock Dividends
Income Statement
GROSS PROFIT
- Operating Expenses OPERATING INCOME (EBIT) - Interest Expense EARNINGS BEFORE TAXES (EBT) - Income Taxes EARNINGS AFTER TAXES (EAT) - Preferred Stock Dividends
Balance Sheet
Outstanding Debt + Shareholders Equity
Total Assets
Balance Sheet
Balance Sheet
Assets
Balance Sheet
Assets
Balance Sheet
Assets Current Assets
Cash Marketable Securities Accounts Receivable Inventories Prepaid Expenses
Long-Term Liabilities
Long-term notes Mortgages
Fixed Assets
Machinery & Equipment Buildings and Land
Equity
Preferred Stock Common Stock (Par value) Paid in Capital Retained Earnings
Other Assets
Investments & patents
Assets
Current Assets:
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Fixed Assets:
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Fixed Assets: machinery and equipment, buildings, and land. Other Assets:
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Fixed Assets: machinery and equipment, buildings, and land. Other Assets: any asset that is not a current asset or fixed asset.
Assets
Current Assets: assets that are relatively liquid, and are expected to be converted to cash within a year.
Cash, marketable securities, accounts receivable, inventories, prepaid expenses.
Fixed Assets: machinery and equipment, buildings, and land. Other Assets: any asset that is not a current asset or fixed asset.
Intangible assets such as patents and copyrights.
Financing
Debt Capital:
Financing
Debt Capital: financing provided by a creditor.
Financing
Debt Capital: financing provided by a creditor. Short-term debt:
Financing
Debt Capital: financing provided by a creditor. Short-term debt: borrowed money that must be repaid within the next 12 months.
Financing
Debt Capital: financing provided by a creditor. Short-term debt: borrowed money that must be repaid within the next 12 months.
Accounts payable, other payables such as interest or taxes payable, accrued expenses, short-term notes.
Financing
Debt Capital: financing provided by a creditor. Short-term debt: borrowed money that must be repaid within the next 12 months.
Accounts payable, other payables such as interest or taxes payable, accrued expenses, short-term notes.
Long-term debt:
Financing
Debt Capital: financing provided by a creditor. Short-term debt: borrowed money that must be repaid within the next 12 months.
Accounts payable, other payables such as interest or taxes payable, accrued expenses, short-term notes.
Long-term debt: loans from banks or other sources that lend money for longer than 12 months.
Financing
Equity Capital:
Financing
Equity Capital: shareholders investment in the firm.
Financing
Equity Capital: shareholders investment in the firm. Preferred Stockholders:
Financing
Equity Capital: shareholders investment in the firm. Preferred Stockholders: receive fixed dividends, and have higher priority than common stockholders in event of liquidation of the firm.
Financing
Equity Capital: shareholders investment in the firm. Preferred Stockholders: received fixed dividends, and have higher priority than common stockholders in event of liquidation of the firm. Common Stockholders:
Financing
Equity Capital: shareholders investment in the firm. Preferred Stockholders: received fixed dividends, and have higher priority than common stockholders in event of liquidation of the firm. Common Stockholders: residual owners of a business. They receive whatever is left after creditors and preferred stockholders are paid.
Cash flows generated through the firms operations and investments in assets
Cash flows paid to - or received by - the firms investors (creditors & stockholders)
Change in gross fixed assets, and any other assets that are on the balance sheet.
Tax Example:
Space Cow Computer has sales of $32 million, cost of goods sold at 60% of sales, cash operating expenses of $2.4 million, and $1.4 million in depreciation expense. The firm has $12 million in 9.5% bonds outstanding. The firm will pay $500,000 in dividends to its common stock holders. Calculate the firms tax liability.
Sales Cost of Goods Sold Operating Expenses Depreciation Expense EBIT or NOI Interest Expense Taxable Income
Income tax rate tax payment $50,000 x .15 = $ 7,500 $25,000 x .25 = 6,250 $25,000 x .34 = 8,500 $235,000 x .39 = 91,650 $7,525,000 x .34 = 2,558,500 Total Tax payment $2,672,400