118-BALANCE SHEETS, STMT OF CASH FLOWS-1

118-BALANCE SHEETS, STMT OF CASH FLOWS-1 - Econ 118 BALANCE...

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Econ 118 – Balance sheet and statement of cash flows p1 Econ 118 BALANCE SHEETS Usefulness Evaluation of liquidity and financial flexibility Assess risk and predict future cash flows Limitations Does not reflect current values (note move to fair value measures) Judgments and estimates Omits items of value: Human resources Technology Brandname Bookkeeperish title – reflects financial position Everything revolves around cash
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Econ 118 – Balance sheet and statement of cash flows p2 ASSETS Current assets Cash, converted to cash, or used in operations w/I one year or the operating cycle , whichever is longer Shown in order of liquidity Cash Marketable securities Fair market value Receivables Net realizable value Inventories Lower of cost or market Prepaids and other Property, plant and equipment,net Tangible; used in operations, long-lived Cost, less accumulated depreciation (NBV); subject to impairment write-downs Long-term investments Securities, PPE not used in op, special funds, affiliates
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This note was uploaded on 09/09/2009 for the course ECON 118 taught by Professor Loster during the Spring '07 term at UCSB.

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118-BALANCE SHEETS, STMT OF CASH FLOWS-1 - Econ 118 BALANCE...

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