PDF_PP_Slides_04_(APSCW_-_F2009)

PDF_PP_Slides_04_(APSCW_-_F2009) - 10/7/2009...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
10/7/2009 1 Core Financial Accounting Objectives: Handout 04 Handout 04, p. 1 1) Understand the difference between operating and nonoperating assets, liabilities, income, and expense and how to use this distinction to reformulate financial statements. 2) Understand why return on equity (ROE) is the summary measure of firm profitability. 3) Understand the accounting decomposition of ROE and how to use the decomposition to evaluate firm performance. 4) Understand the types of ratios used for to analyze factors other than firm profitability: growth prospects, short term liquidity risk, and long term solvency risk.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
10/7/2009 2 Reformulating Financial Statements Handout 04, pp. 1, 2 Balance Sheet Current Operating Assets Long-Term Operating Assets Financial Assets (Nonoperating) Current Operating Liabilities Long-Term Operating Liabilities Financial Obligations (Nonoperating) Equity Liabilities Assets Net Operating Assets (NOA) (Assets – Liabilities ) Net Financial Obligations (NFO) (Liabilities – Assets) We want to distinguish between operating and nonoperating assets and liabilities. Stockholders Equity Total Liabilities and Equity Total Assets Equity (NOA – NFO) Reformulating Financial Statements Handout 04, p. 2 GAAP Balance Sheet Nonoperating (Financial) Items Highlighted Current Assets Current Liabilities Cash and Cash Equivalents Accounts Payable Short term Investments Accrued Liabilities Accounts Receivable Short term Notes and Interest Payable Inventories Deferred Tax Liabilities Prepaid Expenses Current Maturities of Long term Debt Deferred Tax Assets Long term Liabilities Long term Assets Bonds and Notes Payable Long term Investments in Securities Capitalized Lease Obligations Property, Plant, and Equipment, Net Pension and Other Postretirement Liabilities Natural Resources Deferred Tax Liabilities Equity Method Investments Intangible Asset We want to distinguish between operating and nonoperating assets and liabilities. Intangible Assets Minority Interest Deferred Tax Assets Capitalized Lease Assets Other Long term Assets Total Stockholders’ Equity
Background image of page 2
10/7/2009 3 Reformulating Financial Statements: NOA Handout 04, p. 13 May 31, May 25, 2009 2008 ASSETS Current assets: Cash and cash equivalents $ 749.8 $ 661.0 Receivables 953.4 1,081.6 Inventories 1,346.8 1,366.8 Deferred income taxes 15.6 Prepaid expenses and other current assets 469.3 510.6 Land, buildings, and equipment 3,034.9 3,108.1 Goodwill 6,663.0 6,786.1 Other intangible assets 3,747.0 3,777.2 Other assets 895.0 1,750.2 Total assets $ 17,874.8 $ 19,041.6 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 803.4 $ 937.3 Deferred income taxes 28.4 Other current liabilities 1,481.9 1,239.8 Deferred income taxes 1,165.3 1,454.6 Other liabilities 1 931 7 1 923 Other liabilities 1,931.7 1,923.9 Reformulating Financial Statements: NFO Handout 04, p. 13 May 31, May 25, 2009 2008 ASSETS Total assets $ 17,874.8 $ 19,041.6 LIABILITIES AND EQUITY Minority interests 242.3 242.3 Stockholders’ equity: Common stock, 377.3 shares issued, $0.10 par value 37.7 37.7 Additional paid-in capital 1,249.9 1,149.1 Retained earnings 7,235.6 6,510.7 Common stock in treasury, at cost, shares of 49.3 and (2,473.1) (1,658.4) Accumulated other comprehensive income (loss) (875.4) 176.7 Total stockholders’ equity 5,174.7 6,215.8 Total liabilities and equity $ 17,874.8 $ 19,041.6
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 19

PDF_PP_Slides_04_(APSCW_-_F2009) - 10/7/2009...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online