1. Financial Statements, Taxes and Cash Flow1 Financial Statements, Taxes and Cash Flows Financial Statements  Assets Building $190,000 Accumulated Depreciation - 70,000  Liabilities  Equity Common stock$ 287,000

2. Financial Statements, Taxes and Cash Flow2 Financial Statements, Taxes and Cash Flows Financial Statements  Net working capital Current assets: definition? Current liabilities:

3. Financial Statements, Taxes and Cash Flow3 Financial Statements, Taxes and Cash Flows Financial Statements  Income statement Revenue  When? Expenses  When?  Depreciation: definition?  Dividends? Net Income / Number of Shares = EPS  Trend in EPS

4. Financial Statements, Taxes and Cash Flow4 Corporate Tax Rates Calculations  Table 2.3  Marginal tax rate

5. Financial Statements, Taxes and Cash Flow5 Cash Flow Cash Flow From Assets  Operating Cash Flow Revenue - Expenses = Taxable Income - Taxes + Depreciation = Operating Cash Flow

6. Financial Statements, Taxes and Cash Flow6 Cash Flow Cash Flow From Assets  Capital Spending Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation

7. Financial Statements, Taxes and Cash Flow7 Cash Flow Cash Flow From Assets  Net Working Capital Ending Net Working Capital - Beginning Net Working Capital  Increase in Current Assets  Increase in Current Liabilities

8. Financial Statements, Taxes and Cash Flow8 Cash Flow Cash Flow From Assets = Cash Flow to Creditors and Stockholders  Creditors Decrease in Notes Payable + Interest Expense  Stockholders Decrease in Common Stock + Dividends

9. Financial Statements, Taxes and Cash Flow9