Chapter 03 w Learning Obj

Chapter 03 w Learning Obj - 3-1 3-1 Chapter 3 - Financial...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3-1 3-1 Chapter 3 - Financial Statements, Cash Flow, and Taxes Learning Objectives After reading this chapter, students should be able to: Briefly explain the history of accounting and financial statements, and how financial statements are used. List the types of information found in a corporation’s annual report. Explain what a balance sheet is, the information it provides, and how assets and claims on assets are arranged on a balance sheet. Explain what an income statement is and the information it provides. Differentiate between net cash flow and accounting profit. Identify the purpose of the statement of cash flows, list the factors affecting a firm’s cash position that are reflected in this statement, and identify the three categories of activities that are separated out in this statement. Specify the changes reported in a firm’s statement of retained earnings. Discuss what questions can be answered by looking through the financial statements, and explain why investors need to be cautious when they review financial statements. Discuss how certain modifications to the accounting data are needed and used for corporate decision making and stock valuation purposes. In the process, explain the terms: net operating working capital, total operating capital, NOPAT, operating cash flow, and free cash flow; and explain how each is calculated. Define the terms Market Value Added (MVA) and Economic Value Added (EVA), explain how each is calculated, and differentiate between them. Explain why financial managers must be concerned with taxation, and list some of the most important elements of the current tax law, such as the differences between the treatment of dividends and interest paid and interest and dividend income received. 3-2 3-2 CHAPTER 3 Financial Statements, Cash Flow, and Taxes Key Financial Statements Balance sheet Income statements Statement of retained earnings Statement of cash flows Accounting income vs. cash flow Federal tax system 3-3 3-3 The annual report Balance sheet – provides a snapshot of a firm’s financial position at one point in time. Income statement – summarizes a firm’s revenues and expenses over a given period of time. Statement of retained earnings – shows how much of the firm’s earnings were retained, rather than paid out as dividends....
View Full Document

This note was uploaded on 07/18/2009 for the course FIN 3331 taught by Professor Nowacki during the Spring '09 term at Troy.

Page1 / 30

Chapter 03 w Learning Obj - 3-1 3-1 Chapter 3 - Financial...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online