MGMT310_lecture2

MGMT310_lecture2 - Financial Financialstatements...

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nancial statements Financial statements Corporate reports provide important information Balance Sheet A snapshot of the firm Income Statement Measures performance over time Cash flows Describes the health of the firm
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alance sheet Balance sheet Current Net orking Current Assets Liabilities Working Capital (NWC) Long-Term Debt Fixed Assets Shareholders’ Equity Total Assets = Total Liabilities + Shareholders’ Equity
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alance sheet considerations Balance sheet considerations quidity Liquidity Speed and ease of converting an asset to cash ebt vs Equity Debt vs. Equity Debt has precedence over equity to a firm’s cash flows ebt is referred to as financial leverage Debt is referred to as financial leverage Market Value vs. Book Value nder GAAP financial statements list assets at what Under GAAP, financial statements list assets at what they originally cost, not at their current market values. arket value is what is important for decision making. Market value is what is important for decision making.
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verage example Leverage example
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This note was uploaded on 01/31/2011 for the course MGMT 310 taught by Professor Matthewjamesbarcaskey during the Spring '08 term at Purdue.

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MGMT310_lecture2 - Financial Financialstatements...

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