Ch 3 - Sample Balance Sheet 2009 Cash A/R Inventory Other...

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Sample Balance Sheet 2009 2008 2009 2008 Cash 696 58 A/P 307 303 A/R 956 992 N/P 26 119 Inventory 301 361 Other CL 1,662 1,353 Other CA 303 264 Total CL 1,995 1,775 Total CA 2,256 1,675 LT Debt 843 1,091 Net FA 3,138 3,358 C/S 2,556 2,167 Total Assets 5,394 5,033 Total Liab. & Equity 5,394 5,033 Numbers in millions of dollars 3-1
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23-2 Sample Income Statement Revenues 5,000 Cost of Goods Sold 2,006 Expenses 1,740 Depreciation 116 EBIT 1,138 Interest Expense 7 Taxable Income 1,131 Taxes 442 Net Income 689 EPS 3.61 Dividends per share 1.08 Numbers in millions, except EPS & DPS
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33-3 Accounting Sources & Uses of Cash Statement Skip page 47 ( Sources and Uses of Cash) to page 51 (Standardized Financial Statements)
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43-4 Standardized Financial Statements Common-Size Balance Sheets Compute all accounts as a percent of total assets Common-Size Income Statements Compute all line items as a percent of sales Standardized statements make it easier to compare financial information, particularly as the company grows They are also useful for comparing companies of different sizes, particularly within the same industry
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53-5 Ratio Analysis Ratios also allow for better comparison through time or between companies Ratios are used both internally and externally
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63-6 Categories of Financial Ratios Short-term solvency or liquidity ratios Long-term solvency or financial leverage ratios Asset management or turnover ratios Profitability ratios Market value ratios
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73-7 Computing Liquidity Ratios Current Ratio = CA / CL 2256 / 1995 = 1.13 times Quick Ratio = (CA – Inventory) / CL (2256 – 301) / 1995 = .98 times Cash Ratio = Cash / CL 696 / 1995 = .35 times
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