Advanced Financial Management

Advanced Financial Management - Cash From Financing...

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Selected Slides for First Two Lectures Please note: these are the most important slides from those lectures. Also, these are not lecture notes. These slides are designed to be used together with your lecture notes, not instead of your lecture notes.
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Sales Cost of Goods Sold (CGS) =Gross ProFt (GP) Operating Expenses Excluding Depreciation (e.g.: Sell- ing, Administrative, Wages, Salaries, R&D and Market- ing) Depreciation =EBIT (Operating Income) Interest All Other Expenses (e.g., “extraordinary items”) =EBT Taxes =EAT (Net Income, NI)
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Cash +Mktble Sec. S-T portion of L-T Debt +A/R +A/P +Inventories +S-T debt +Prepaid Taxes +Taxes Payable +Other CA +Other CL =TCA =TCL +L-T debt +Other Assets +Deferred Taxes +Other Liabilities =TA =TL +OE =TL+OE
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Cash From Operating Activities (COA) =NI +Depreciation & Amortiza- tion + Deferred Taxes A/R Inventory + A/P + Taxes Payable + L-T Liabilities Cash From Investing Activities (CIA) = L-T Assets Mktble Securities Acquizitions
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Unformatted text preview: Cash From Financing Activities (CFA) = S-T Debt + L-T Debt + Common and Preferred Stocks Dividends Treasury Stock Cash this year = Cash Last Year + COA + CIA + CFA. Note that usually CIA < 0 since any investment requires a cash outfow. Some problems with nancial statements: 1) Owners Equity: a) historic cost o assets; b) e f ects o infation; c) valuation o intangibles (trademarks, customer base, skilull employees, technology, goodwill, etc.) 2) Unrealized Capital Gains are not accounted or. 3) Cost o Equity is not accounted or. ROE = NPM TAT EM GPM Inv. Turnover Debt Ratio OPM A/R Turover Debt-to-Equity . . . Cash Turnover Debt-to-MktEquity A/P Turnover Mkt-based Debt Ratio A/R Collect. Period TIE Days Sales in Cash TFCE Days A/P Outstanding TPC TAT . . . FAT . . . Also: liquidity Ratios (CR, QR), and Return on Invested Capital (RIC)....
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Advanced Financial Management - Cash From Financing...

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