Lecture 1- Cash Flows

Lecture 1- Cash Flows - Welcome to FIN300 Mike Inglis...

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Welcome to FIN300 Mike Inglis Office hours: Tuesdays 1:00pm to 3:00pm. Room: RBB 1085 E-mail: m2inglis@ryerson.ca
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FIN300: Intro Finance What is Finance?
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Mike’s 6 concepts of Finance Cash Flow vs. Income Ex-anti vs. Ex-post Time Value of Money Risk and Return Market Efficiency / No Arbitrage Understanding People
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Understanding People
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Agency Problems Conflict between stakeholders Results in agency costs and loss of value to corporation
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Financial Statement Analysis Key source of information for decision making Need to know where you stand before you can make plans for the future The emphasis in this course is on the analysis of cash flow Cash flow is one of the most important pieces of information that a financial manager can derive from financial statements
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Balance Sheet Snapshot in time of what the firm owns (assets), what is owes (liabilities), and the difference between the two (shareholders equity) Assets = Liabilities +Equity Net Working Capital = Current Assets – Current Liabilities
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Balance Sheet Liabilities: Ability to convert to cash quickly without a significant loss in value Liquid firms are less likely to experience financial distress However, liquid assets earn a lower return Tradeoff between liquid and illiquid assets
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Balance Sheet Debt vs. Equity Creditors have the first claim on firm’s cash flow and assets
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This note was uploaded on 03/15/2010 for the course BUSINESS MGT200 taught by Professor Manjuris during the Spring '08 term at Ryerson.

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Lecture 1- Cash Flows - Welcome to FIN300 Mike Inglis...

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