Chapter 03 - 3-1 3-1 CHAPTER 3 Financial Statements, Cash...

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Unformatted text preview: 3-1 3-1 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 3-2 3-2 The annual report Balance sheet provides a snapshot of a firms financial position at one point in time. Income statement summarizes a firms revenues and expenses over a given period of time. Statement of retained earnings shows how much of the firms earnings were retained, rather than paid out as dividends. Statement of cash flows reports the impact of a firms activities on cash flows over a given period of time. 3-3 3-3 Balance sheet: Assets Cash A/R Inventories Total CA Gross FA Less: Dep. Net FA Total Assets 2005 7,282 632,160 1,287,360 1,926,802 1,202,950 263,160 939,790 2,866,592 2004 57,600 351,200 715,200 1,124,000 491,000 146,200 344,800 1,468,800 3-4 3-4 Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L & E 2005 524,160 636,808 489,600 1,650,568 723,432 460,000 32,592 492,592 2,866,592 2004 145,600 200,000 136,000 481,600 323,432 460,000 203,768 663,768 1,468,800 3-5 3-5 Income statement Sales COGS Other expenses EBITDA Depr. & Amort. EBIT Interest Exp. EBT Taxes Net income 2005 6,034,000 5,528,000 519,988 (13,988) 116,960 (130,948) 136,012 (266,960) (106,784) (160,176) 2004 3,432,000 2,864,000 358,672 209,328 18,900 190,428 43,828 146,600 58,640 87,960 3-6 3-6 Other data No. of shares EPS DPS Stock price Lease pmts 2005 100,000-$1.602 $0.11 $2.25 $40,000 2004 100,000 $0.88 $0.22 $8.50 $40,000 3-7 3-7 Statement of Retained Earnings (2005) Balance of retained earnings, 12/31/04 Add: Net income, 2005 Less: Dividends paid Balance of retained earnings, 12/31/05 $203,768 (160,176) (11,000) $32,592 3-8 3-8 Statement of Cash Flows (2005) OPERATING ACTIVITIES Net income Add (Sources of cash): Depreciation Increase in A/P Increase in accruals Subtract (Uses of cash): Increase in A/R Increase in inventories Net cash provided by ops....
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Chapter 03 - 3-1 3-1 CHAPTER 3 Financial Statements, Cash...

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