ch 03 (Fin Stmts) (1) - 03 Chapter model 12/10/08 Chapter...

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Unformatted text preview: 03 Chapter model 12/10/08 Chapter 3. Financial Statements, Cash Flows, and Taxes THE ANNUAL REPORT INPUT DATA SECTION: Historical Data Used in the Analysis 2008 2007 Year-end stock price $23.06 $26.00 Shares outstanding (in millions) 50 50 Tax rate 40% 40% BALANCE SHEETS - Allied Food Products - December 31 (in millions of dollars) 2008 2007 Assets Cash and equivalents $10 $80 Accounts receivable 375 315 Inventories 615 415 Total current assets $1,000 $810 Net plant and equipment 1,000 870 Total assets $2,000 $1,680 Liabilities and Equity Accounts payable $60 $30 Accruals 140 130 Notes payable 110 60 Total current liabilities $310 $220 Long-term bonds 750 580 Total debt $1,060 $800 Common stock (50,000,000 shares) 130 130 This model is STRICTLY OPTIONAL. Neither students nor instructors need to go through it. However, if someone wants to practice with Excel, then the model can be useful. Also, on the tabs we show solutions for the within-chapter self-test questions. The annual report contains a verbal section plus four key statements: the balance sheet, income statement, statement of stockholders' equity, and statement of cash flows. These statements contain a wealth of information that is used by bankers, stock and bond analysts, and managers. Hence, they are quite important. Spreadsheets are used both to create and to analyze these statements, as we demonstrate in this model. In this model, we start with the same balance sheet and income statement that was used in the chapter, but in an Excel format, and then we show how spreadsheets can be used to analyze the data. The analysis continues to cover the statement of stockholders' equity, statement of cash flows, and shows how accounting data may be modified to evaluate managerial performance. BALANCE SHEET (Section 3-2) The balance sheet can be thought of as a snapshot in time of a firm's financial position. You can observe the firm's level of assets and the manner in which they have used debt and equity to fund those assets. Retained earnings 810 750 Total common equity $940 $880 Total liabilities and equity $2,000 $1,680 INCOME STATEMENTS - Allied Food Products - Years Ending December 31 (in millions of dollars) 2008 2007 Net sales $3,000.0 $3,000....
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This note was uploaded on 10/13/2010 for the course USMLE na taught by Professor Na during the Spring '10 term at St. Matthew's University.

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ch 03 (Fin Stmts) (1) - 03 Chapter model 12/10/08 Chapter...

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