Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
2 - Understanding Financial
Statements, Taxes, and Cash Flows
Income Statement
SALES
- EXPENSES
= PROFIT
Income Statement
SALES
- EXPENSES
= PROFIT
Revenue
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
Financing Costs
Taxes
SALES
Income Statement
SALES
Income Statement
SALES
Income Statement
Balance Sheet
Total Assets
Outstanding
Debt
+
Shareholders
Equity
Balance Sheet
Balance Sheet
Assets
Balance Sheet
Assets
Balance Sheet
Assets
Current Assets
Cash
Marketable Securities
Accounts Receivable
Inventories
Prepaid Expenses
Fixed Assets
Machinery & Equipment
Buildings and Land
Other Assets
Investments & patents
Long-Term Liabilities
Long-term notes
Mortgages
Equity
Preferred Stock
Common Stock (Par value)
Paid in Capital
Retained Earnings
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.
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.
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.
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.
$1 - $50,000
15%
$50,001 - $75,000
25%
$75,001 - $100,000
34%
$100,001 - $335,000
39%
$335,001 - $10,000,000
34%
$10,000,001 - $15,000,000 35%
$15,000,001 - $18,333,333 38%
over $18,333,333
35%
Firms Financing
Free cash flows
Operating income
+ depreciation
- cash tax payments
[Change in current
assets]
[change in non-interest
bearing current liabilities]
change in stock
Financing Free Cash Flows
Tax Example:
Sales
Cost of Goods Sold
Operating Expenses
Depreciation Expense
EBIT or NOI
Interest Expense
Taxable Income
$32,000,000
(19,200,000)
(2,400,000)
(1,400,000)
9,000,000
(1,140,000)
7,860,000
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
short cut: $7,860,000 x .34 = $2,672,400