Download presentation
Presentation is loading. Please wait.
Published byLynn Morgan Modified over 9 years ago
1
Financial Statements and Cash Flow Key Financial Statements Balance Sheet Income Statement Statement of Stockholders’ Equity Statement of Cash Flows Free Cash Flow Chapter 3 3-1
2
The Annual Report Verbal statement Balance sheet – provides a snapshot of a firm’s financial position at one point in time. Income statement – summarizes a firm’s revenues and expenses over a given period of time. Statement of stockholders’ equity – shows how much of the firm’s earnings were retained, rather than paid out as dividends. Statement of cash flows – reports the impact of a firm’s activities on cash flows over a given period of time. 3-2
3
Balance Sheet Assets = Liabilities + stockholders’ equity Tot. Assets = Cur. Assets + Fixed Assets Tot. Liab.=Cur. Liab. + LT Debt Net Working Capital = Current assets – (Payables + Accruals) 3-3
4
Income Statement Operating income (EBIT) = Sales revenues – operating costs EPS = NI / common shares outstanding DPS = Div. paid / common shares outstanding 3-4
5
Statement of cash flows Operating Activities Long term investing activities Financing Activities 3-5
6
Statement of stockholders equity Retained earnings represents a claim against assets Retained earnings as reported on the balance sheet do not represent cash and are not available for dividends or anything else 3-6
7
The free cash flow (FCF) 3-7 Is negative free cash flow always a bad sign? FCF is the amount of cash that could be withdrawn without harming a firm’s ability to operate and to produce future cash flows
8
End of Ch. Problems (3-1) Pg. 76 (3-2) Pg. 76 (3-6) Pg. 76 (3-7) (a & b only) Pg.76-77 3-8
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.