1. Short Review These are the main topics but of course you should be familiar with all the notes.

2. Income Statement Know how to calculate ‘missing’ items. Make sure that the given numbers are all translated to the same period. Add the percentage for each row

3. Cash Budget Let us look at a company that expects the following: –Sales are expected to grow at 7% a month –20% of sales are COD (cash/check on delivery) –30% of sales are paid during the month following the sale –50% of sales are paid in the second month after the sale –Manpower and fixed costs are 20% of sales –Inventory purchases are 50% of the following month’s sales –Loan repayments of $2000 per month Indeed, this seems to be pretty complicated. Fortunately ….

4. Cash Budget This is nice, but it does not really reflect the cash position. How much do we have?

5. Cash Budget The Ending Balance is an important indicator of the company’s cash position. It is calculated as: +Beginning Cash Balance +Total Collections (Total Cash IN) -Total Disbursements (Total Cash OUT) =Unadjusted Cash Balance +Current Borrowing =Ending Balance Let us add these elements to our previous Cash Balance

6. Cash Budget If you borrow money, make sure interest is paid on it. You may need an auxiliary row.

7. Bonds With Excel we find that at the end we have: Interest on Bond Cash from previous year + current interest This is the cash we end up with

8. Bonds Now we can discount this back to today And we find that the current value is 5,197 dollars.

9. Balance Sheet Use the Center and Merge Button Change the Font Make the totals bold Underline before the subtotals Make the main items italic

10. Balance Sheet May be, it’s quite simple after all! Sum Equals

11. Cash Flow Statement Use the Center and Merge Button Change the Font Make the total bold Underline before the subtotals Make the main items italic

12. Now let us look at how we can actually obtain some of the items from the Balance Sheet and the Income Statement. Cash Flow from Operating Activities Receipts Disbursements Cash Flow Statement Payments from Customers =Sales - Change in Accounts Receivable To Suppliers=Cost of Goods sold + Change in Inventory – Change in Accounts Payable (for Inventory)

14. Stocks On this sheet we can enter the valuation of the portfolio. What’s important here is that stocks have a stock- price representing their value. Stocks may also pay dividends.

15. See Ya! Compound Long and Prosper ! Send me an e-mail in 20years and tell me how your doing! (If I’m not at NUS, use a search engine to find me!) All the best and good luck!