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- Financial statement showing a firm's accounting value on a particular date.
- Shows assets, liabilities, and difference which is equity.
- Assets = Liabilities + Owner's Equity.
- One that has a relatively long life.
- Tangible or Intangible.
- Assets that last less than one year.
- Accounts recievable.
- debts that are to be paid off within the year.
- Accounts payable.
Long Term Liability?
- Debt to be paid after a current year, longer loan time.
If business were liquidated, residual value to shareholders.
Net Working Capital?
Current assets less current liabilities.
The speed and ease with which an asset can be converted into cash without a significant loss in value.
- Increases potential reward to shareholders, but also increases potential financial distress and business failure.
- Debt as a portion of asset.
Generally Accepted Accounting Principles?
The common set of standards and procedures by which audited financial statements are prepared.
A different value requirining a different balance sheet than market value.
- Measures performance over some period of time, usually a quarter of a year.
- Revenues - Expenses = Income
Earnings Per Share?
Net Income / Total Shares Outstanding
Dividends Per Share?
Total Dividends / Total Shares Outstanding
Expenses chanrged against revenues that do not directly affect cash flow, such as depreciation.
Average Tax Rate?
Total Taxes Paid / Taxable Income
Marginal Tax Rate?
Amount of tax payable on the next dollar earned.
(Rate One x 50,000) + (Rate Two x 25,000) + (Rate Three x 25,000) Until Amount is Reached.
Cash Flow from Assets?
- The total Cash Flow to creditors an cash flow to stockholders, consisting of the following:
- Operating Cash Flow - Capital Spending - Change in Net Working Capital
Operating Cash Flow?
- Cash generated from a firm's normal business activities.
- Earnings (before interest and taxes) + Depreciation - Taxes
Net Capital Spending?
Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation
Change in Net Working Capital?
Ending NWC - Beginning NWC
Cash Flow to Creditors?
Dividends paid out by a firm less net new equity raised.
Cash Flow to Stockholders?
Dividends Paid - Net New Equity Raised