forecasting

forecasting - FINA 537 Equity Valuation Professor Laura...

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Forecasting FINA 537 Equity Valuation Professor Laura Xiaolei Liu
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2 Coca-Cola: Actual Income Statement $2,554 $2,986 $3,492 Net Income $0 $0 $0 Cumulative effect of accounting change, net $2,554 $2,986 $3,492 Income from operations $1,174 $1,342 $1,104 Income taxes $3,728 $4,328 $4,596 Income before taxes $38 $329 $729 Other income (loss) $199 $272 $286 Interest expense $181 $245 $238 Interest income $3,708 $4,026 $3,915 Operating income (loss) $6,297 $7,052 $7,893 Selling, administrative & general expenses $10,005 $11,078 $11,808 Gross profit $6,167 $6,940 $6,738 Cost of goods sold $16,172 $18,018 $18,546 Sales 12/31/1994 12/31/1995 12/31/1996 Fiscal Year ended
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3 Coca-Cola: Actual Balance Sheet $13,873 $15,041 $16,161 Total assets $1,163 $1,597 $1,779 Other assets $660 $944 $753 Intangible assets $4,080 $4,336 $3,550 $2,077 $2,321 $2,031 Less: Allowance for depreciation $6,157 $6,657 $5,581 $2,765 $2,714 $4,169 Long-term investments $5,205 $5,450 $5,910 Total current assets $1,102 $1,323 $1,659 $1,047 $1,117 $952 Inventories $1,525 $1,695 $1,641 Accounts receivable $1,531 $1,315 $1,658 Cash and marketable securities 12/31/1994 12/31/1995 12/31/1996 Fiscal Year ended
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4 Coca-Cola: Actual Balance Sheet $13,873 $15,041 $16,161 $5,245 $5,392 $6,156 Total shareholders' equity ($7,073) ($8,799) ($10,320) Treasury stock ($288) ($410) ($567) Other $11,006 $12,882 $15,127 Retained earnings $1,173 $863 $1,058 Capital surplus $427 $856 $858 Common stock $8,628 $9,649 $10,005 Total liabilities $1,035 $1,160 $1,483 Other liabilities $1,426 $1,141 $1,116 Long-term debt $6,167 $7,348 $7,406 Total current liabilities $1,530 $1,322 $1,037 Accrued income taxes $2,073 $2,923 $3,397 $2,564 $3,103 $2,972 12/31/1994 12/31/1995 12/31/1996 Fiscal Year ended
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5 Financial statement analysis The process of expressing F/S numbers as ratios to: More clearly assess past and current performance. Use as inputs to facilitate projections of future performance (i.e., forecasting and equity valuation).
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6 Type of financial analysis Common-Size F/S (cross-sectional analysis). Trend F/S (time-series analysis). Financial Ratio Analysis.
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7 Common Size Statement All items in B/S (I/S) are expressed as a percentage of total assets (sales) Allows external users to better appreciate the relative size and importance of various items. Comparisons across firms is enhanced by preparing the common-size statements
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8 Coca-Cola: Common Size (Actual) Income Statement 15.79% 16.57% 18.83% Net Income 0.00% 0.00% 0.00% Cumulative effect of accounting change, net 15.79% 16.57% 18.83% Income from operations 7.26% 7.45% 5.95% Income taxes 23.05% 24.02% 24.78% Income before taxes 0.23% 1.83% 3.93% Other income (loss) 1.23% 1.51% 1.54% Interest expense 1.12% 1.36% 1.28% Interest income 22.93% 22.34% 21.11% Operating income (loss)
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This note was uploaded on 04/12/2010 for the course FINA 537 taught by Professor Luxiaolei during the Spring '09 term at HKUST.

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forecasting - FINA 537 Equity Valuation Professor Laura...

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