chap_02 - Chapter 2 FINANCIAL STATEMENTS, TAXES AND CASH...

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Chapter 2 FINANCIAL STATEMENTS, TAXES AND CASH FLOW SLIDES CHAPTER WEB SITES Web sites may be referenced more than once in a chapter. This table just includes the section for the first reference. Chapter Section Web Address 2.1 finance.yahoo.com money.cnn.com www.disney.com www.sec.gov www.fasb.org 2.3 www.irs.gov What’s On the Web? www.coca-cola.com www.dukeenergy.com www.coopertires.com www.ibm.com 2.1 Key Concepts and Skills 2.2 Chapter Outline 2.3 The Balance Sheet 2.4 Figure 2.1 2.5 US Corporation Balance Sheet – Table 2.1 2.6 Market vs. Book Value 2.7 Klingon Corporation 2.8 Income Statement 2.9 US Corporation Income Statement – Table 2.2 2.10 Example: Work the Web 2.11 Taxes 2.12 Example: Marginal vs. Average Rates 2.13 The Concept of Cash Flow 2.14 Cash Flow From Assets 2.15 Example: US Corporation 2.16 Table 2.5 2.17 Example: Balance Sheet and Income Statement Information 2.18 Example: Cash Flows 2.19 Quick Quiz
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A-18 FINANCIAL STATEMENTS, TAXES AND CASH FLOW CHAPTER ORGANIZATION 2.1 THE BALANCE SHEET Assets: The Left-Hand Side Liabilities and Owners’ Equity: The Right-Hand Side Net Working Capital Liquidity Debt versus Equity Market Value versus Book Value 2.2 THE INCOME STATEMENT GAAP and the Income Statement Noncash Items Time and Costs 2.3 TAXES Corporate Tax Rates Average versus Marginal Tax Rates 2.4 CASH FLOW Cash Flow from Assets Cash Flow to Creditors and Stockholders An Example: Cash Flows for Dole Cola ANNOTATED CHAPTER OUTLINE Slide 2.1 Key Concepts and Skills Slide 2.2 Chapter Outline 2.1. The Balance Sheet Slide 2.3 The Balance Sheet .A Assets: The Left-Hand Side Assets are divided into several categories. Make sure that students recall the difference between current and fixed assets and tangible and intangible assets. .B Liabilities and Owners’ Equity: The Right-Hand Side The right-hand side is categorized by the firm’s debt and it’s ownership. Make sure that students recall the difference between current and long-term liabilities. Recall the balance sheet identity: owners’ equity = assets – liabilities
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CHAPTER 2 A-19 Slide 2.4 Figure 2.1 .C Net Working Capital The difference between a firm’s current assets and its current liabilities. Lecture Tip, page 23: Students sometimes find it difficult to see the relationship between the decisions made by financial managers and the values that subsequently appear on the firm’s balance sheet. One way to help them see the “big picture” is to emphasize that all finance decisions are either investment decisions or financing decisions. Investment decisions involve the purchase and sale of any assets (not just financial assets). Investment decisions show up on the left-hand side of the balance sheet. Financing decisions involve the choice of whether to borrow
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chap_02 - Chapter 2 FINANCIAL STATEMENTS, TAXES AND CASH...

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