公司理财2-罗斯.ppt

Chapter 2Financial Statements and Cash Flows10 September 2012
Key Concepts and Skills
Know the difference betweenChapter 2Financial Statements and Cash Flows10 September 2012
Key Concepts and Skills
Know the difference between book value and market value
Know the difference between accounting income and cash flow
Know how to determine a firm’s cash flow from its financial statements
Chapter Outline
The Balance Sheet
The Income Statement
Cash Flow
CHAPTER WEB SITES






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Balance Sheet
The balance sheet is a snapshot of the firm’s assets and liabilities at a given point in time
Assets are listed in order of decreasing liquidity
Ease of conversion to cash
Without significant loss of value
Balance Sheet Identity
Assets = Liabilities + Stockholders’ Equity
The Balance Sheet - Figure
Net Working Capital and Liquidity
Net Working Capital
Current Assets – Current Liabilities
Positive when the cash that will be received over the next 12 months exceeds the cash that will be paid out
Usually positive in a healthy firm
Liquidity
Ability to convert to cash quickly without a significant loss in value
Liquid firms are less likely to experience financial distress
But liquid assets earn a lower return
Trade-off to find balance between liquid and illiquid assets
US Corporation Balance Sheet – Table
Market Vs. Book Value
The balance sheet provides the book value of the assets, liabilities, and equity.
Market value is the price at which the assets, liabilities ,or equity can actually be bought or sold.
Market value and book value are often very different. Why?
Which is more important to the decision-making process?
Example Klingon Corporation