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Using Boundless Presentations The Appendix The appendix is for you to use to add depth and breadth to your lectures. You can simply drag and drop slides from the appendix into the main presentation to make for a richer lecture experience. Free to edit, share, and copy Feel free to edit, share, and make as many copies of the Boundless presentations as you like. We encourage you to take these presentations and make them your own. Free to share, print, make copies and changes. Get yours at Boundless Teaching Platform Boundless empowers educators to engage their students with affordable, customizable textbooks and intuitive teaching tools. The free Boundless Teaching Platform gives educators the ability to customize textbooks in more than 20 subjects that align to hundreds of popular titles. Get started by using high quality Boundless books, or make switching to our platform easier by building from Boundless content pre-organized to match the assigned textbook. This platform gives educators the tools they need to assign readings and assessments, monitor student activity, and lead their classes with pre-made teaching resources. Get started now at: If you have any questions or problems please

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The Statement of Equity Depreciation Free Cash Flow MVA and EVA Other Statements Financial Statements, Taxes, and Cash Flow > Other Statements Free to share, print, make copies and changes. Get yours at ect&utm_source=boundless

The statement breaks down changes in the owners' interest in the organization. Line items typically include profits or losses from operations, dividends paid, issue or redemption of stock, and any other items charged or credited to retained earnings. Owners' equity = assets − liabilities. The statement of equity uses information from the income statement and provides information to the balance sheet. Ending retained earnings = beginning retained earnings − dividends paid + net income. The Statement of Equity Free to share, print, make copies and changes. Get yours at statement-of-equity ?campaign_content=book_192_section_36&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess The Statement of Retained Earnings and Stockholders' Equity View on Boundless.com Financial Statements, Taxes, and Cash Flow > Other Statements

Depreciation refers to the allocation of the cost of assets to periods in which the assets are used (depreciation with the matching principle). Generally this involves four criteria: cost of the asset, expected salvage value (residual value of the asset), estimated useful life of the asset, and a method of apportioning the cost over such life. There are several methods for calculating depreciation, generally based on either the passage of time or the level of activity of the asset: straight-line depreciation, accelerated depreciation methods, activity depreciation methods, sum-of-years' digits method, and units-of-production method. Depreciation Free to share, print, make copies and changes. Get yours at ?campaign_content=book_192_section_36&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Depreciation View on Boundless.com Financial Statements, Taxes, and Cash Flow > Other Statements

There are four different methods for calculating free cash flows. Free cash flow measures the ease with which businesses can grow and pay dividends to shareholders. Net income and free cash flows are different. Some investors prefer using free cash flow instead of net income to measure a company's financial performance because free cash flow is more difficult to manipulate than net income. Free Cash Flow Free to share, print, make copies and changes. Get yours at flow ?campaign_content=book_192_section_36&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess Free Cash Flow View on Boundless.com Financial Statements, Taxes, and Cash Flow > Other Statements

Market Value Added (MVA) is the difference between the current market value of a firm and the capital contributed by investors. Economic Value Added or EVA, is an estimate of a firm's economic profit – being the value created in excess of the required return of the company's investors (being shareholders and debt holders). The firm's market value added, or MVA, is the discounted sum (present value) of all future expected economic value added: MVA = Present Value of a series of EVA values. MVA and EVA Free to share, print, make copies and changes. Get yours at ?campaign_content=book_192_section_36&campaign_term=Finance&utm_campaign=powerpoint&utm_medium=direct&utm_source=boundl ess MVA View on Boundless.com Financial Statements, Taxes, and Cash Flow > Other Statements

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Key terms amortization The distribution of the cost of an intangible asset, such as an intellectual property right, over the projected useful life of the asset. capital expenditure Funds spent by a company to acquire or upgrade a long-term asset. net working capital current assets minus current liabilities NOPAT NOPAT (net operating profit after tax) is profits derived from a company's operations after cash taxes but before financing costs and non-cash bookkeeping entries. It is the total pool of profits available to provide a cash return to those who provide capital to the firm. retained earnings The portion of net income that is retained by the corporation rather than distributed to its owners as dividends. salvage value The estimated value of an asset at the end of its useful life. Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow

MVA Calculation of MVA Free to share, print, make copies and changes. Get yours at Wikipedia. "Market value added." GNU FDL View on Boundless.comGNU FDLhttp://en.wikipedia.org/wiki/Market_value_addedView on Boundless.com Financial Statements, Taxes, and Cash Flow

Depreciation This is the units-of-production method for calculating depreciation. Free to share, print, make copies and changes. Get yours at Wikipedia. "Depreciation." GNU FDL View on Boundless.comGNU FDLhttp://en.wikipedia.org/wiki/DepreciationView on Boundless.com Financial Statements, Taxes, and Cash Flow

MVA and EVA MVA is the present value of a series of EVA values. Free to share, print, make copies and changes. Get yours at Wikipedia. "Economic value added." GNU FDL View on Boundless.comGNU FDLhttp://en.wikipedia.org/wiki/Economic_value_addedView on Boundless.com Financial Statements, Taxes, and Cash Flow

Depreciation This is the formula used to calculate straight-line depreciation. Free to share, print, make copies and changes. Get yours at Wikipedia. "Depreciation." GNU FDL View on Boundless.comGNU FDLhttp://en.wikipedia.org/wiki/DepreciationView on Boundless.com Financial Statements, Taxes, and Cash Flow

Free Cash Flow An example of calculating free cash flow. Free to share, print, make copies and changes. Get yours at Wikimedia. "DCFM Calculator." CC BY-SA View on Boundless.comCC BY-SAhttp://commons.wikimedia.org/wiki/File:DCFM_Calculator.JPGView on Boundless.com Financial Statements, Taxes, and Cash Flow

The Statement of Retained Earnings and Stockholders' Equity The statement of retained earnings uses information from the income statement and provides information to the balance sheet. Free to share, print, make copies and changes. Get yours at Flickr. "All sizes | Analyzing Financial Data | Flickr - Photo Sharing!." CC BY View on Boundless.comCC BYhttp:// on Boundless.com Financial Statements, Taxes, and Cash Flow

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow Which of the following is not included in a company's statement of equity? A) Goodwill B) Dividends paid C) Profits/losses from opoerations D) Redemption of Stock

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow Which of the following is not included in a company's statement of equity? A) Goodwill B) Dividends paid C) Profits/losses from opoerations D) Redemption of Stock

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow A company's retained earnings at the beginning of the year is $1 million. It paid $100,000 in dividends, had $250,000 in net income, and its goodwill increased by $10,000. What is its retained earnings as of the end of the year? A) $1,160,00 B) $1,150,000 C) $1,250,000 D) $1,260,000

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow A company's retained earnings at the beginning of the year is $1 million. It paid $100,000 in dividends, had $250,000 in net income, and its goodwill increased by $10,000. What is its retained earnings as of the end of the year? A) $1,160,00 B) $1,150,000 C) $1,250,000 D) $1,260,000

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow Which of the following is a correct way to calculate depreciation expense? A) Straight-line = (acquisition cost - salvage value) / number of years of the asset's useful life B) Activity depreciation = (acquisition cost - salvage value) / unit of activity (e.g. miles driven) C) All of these answers D) Accelerated Depreciation = Depreciation Rate * Book Value at Beginning of Year

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow Which of the following is a correct way to calculate depreciation expense? A) Straight-line = (acquisition cost - salvage value) / number of years of the asset's useful life B) Activity depreciation = (acquisition cost - salvage value) / unit of activity (e.g. miles driven) C) All of these answers D) Accelerated Depreciation = Depreciation Rate * Book Value at Beginning of Year

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow A company had an after tax profit of $1,500,000. Its debt to equity ratio was 0.5. It had $200,000 in capital expenditures for the year and a $100,000 increase in working capital. It had $250,000 in depreciation expenses. What is its free cash flow? A) $1,400,000 B) $1,225,000 C) $1,275,000 D) $1,150,000

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow A company had an after tax profit of $1,500,000. Its debt to equity ratio was 0.5. It had $200,000 in capital expenditures for the year and a $100,000 increase in working capital. It had $250,000 in depreciation expenses. What is its free cash flow? A) $1,400,000 B) $1,225,000 C) $1,275,000 D) $1,150,000

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow A company has earnings before income tax of $2 million and a 15% tax rate. It had $250,000 in depreciation expenses with a $50,000 increase in working capital. It had another $100,00 in capital expenditures. What is its free cash flow. A) $1,700,000 B) $1,800,000 C) $1,950,000 D) $1,850,000

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow A company has earnings before income tax of $2 million and a 15% tax rate. It had $250,000 in depreciation expenses with a $50,000 increase in working capital. It had another $100,00 in capital expenditures. What is its free cash flow. A) $1,700,000 B) $1,800,000 C) $1,950,000 D) $1,850,000

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow When is a business a good investment based on the Market Value Added (MVA) metric? A) MVA is positive. B) MVA exceeds the investors' initial investment. C) MVA is greater than the business's net operating profit after taxes. D) The MVA is greater than what the investors could have received by investing in the market portfolio.

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow When is a business a good investment based on the Market Value Added (MVA) metric? A) MVA is positive. B) MVA exceeds the investors' initial investment. C) MVA is greater than the business's net operating profit after taxes. D) The MVA is greater than what the investors could have received by investing in the market portfolio.

Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow Assume a businesses's return on investment capital is 8%,its weighted average cost of capital is 4%, and its economic capital employed is $1,000,000. What is its EVA? A) $400,000 B) $120,000 C) $40,000 D) $60,000

Free to share, print, make copies and changes. Get yours at Boundless - LO. "Boundless." CC BY-SA BY-SA 3.0http:// Financial Statements, Taxes, and Cash Flow Assume a businesses's return on investment capital is 8%,its weighted average cost of capital is 4%, and its economic capital employed is $1,000,000. What is its EVA? A) $400,000 B) $120,000 C) $40,000 D) $60,000

Attribution Wikipedia. "Economic value added." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Economic_value_added Wikipedia. "Market value added." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Market_value_added Wikipedia. "NOPAT." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/NOPAT Wikipedia. "Statement of retained earnings." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Statement_of_retained_earnings Wiktionary. "retained earnings." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/retained+earnings Wikipedia. "Depreciation." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Depreciation Wikipedia. "salvage value." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/salvage%20value Wikipedia. "Free cash flow." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Free_cash_flow Wikipedia. "Net working capital." CC BY-SA BY-SA 3.0http://en.wikipedia.org/wiki/Net_working_capital Wiktionary. "amortization." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/amortization Wiktionary. "capital expenditure." CC BY-SA BY-SA 3.0http://en.wiktionary.org/wiki/capital+expenditure Free to share, print, make copies and changes. Get yours at Financial Statements, Taxes, and Cash Flow