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Finance_313_Chapter_2_RWJ_Outline

Finance_313_Chapter_2_RWJ_Outline - 64.04 Net Income 96.05...

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Finance 313 Chapter 2 Outline Richey Financial Statements, Taxes, and Cash Flows Greg's Ice Cream Shop Balance Sheet As of Dec. 31, 2008 (000's) Assets 2008 2007 Cash and Equivalents 52.00 57.60 Accounts Receivable 402.00 351.20 Inventory 836.00 715.20 Total Current Assets 1,290.0 0 1,124.00 Plant and Equipment 527.00 491.00 Accumulated Depreciation 166.20 146.20 Net Fixed Assets 360.80 344.80 Total Assets 1,650.80 1,468.80 Liabilities and Owners’ Equity Accounts Payable 175.20 145.60 Short-term Notes Payable 225.00 200.00 Other Current Liabilities 140.00 136.00 Total Current Liabilities 540.20 481.60 Long-term Debt 424.61 323.43 Total Liabilities 964.81 805.03 Common Stock 460.00 460.00 Retained Earnings 225.99 203.77 Total Owners’ Equity 685.99 663.77 Total Liabilities and Owners’ Equity 1,650.80 1,468.80 Greg's Ice Cream Shop Income Statement For the Year Ended Dec. 31, 2008 ($ 000's) 2008 Sales 4,300.00 Cost of Goods Sold 3,609.11 Gross Profit 690.89 Selling and G&A Expenses 334.80 Fixed Expenses 100.00 Depreciation Expenses 20.00 EBIT 236.09 Interest Expense 76.00 Earnings Before Taxes 160.09 Taxes
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Unformatted text preview: 64.04 Net Income 96.05 Dividends 73.83 Addition to Retained Earnings 22.22 Tax Rate 40% 1. The Balance Sheet A = L+OE or A-L = OE a. Assets: The Left-Hand Side Finance 313 Chapter 2 Outline Richey b. Liabilities and Owners’ Equity: The Right Hand Side c. Net Working Capital d. Liquidity e. Debt vs. Equity f. Market Value vs. Book Value 2. The Income Statement Revenue – Expenses = Income a. Noncash Items b. Time and Costs 3. Taxes a. Corporate Tax Rates b. Average vs. Marginal Tax Rates i. Use table 2.3 to calculate Greg’s Federal Tax (hint: $64.04 includes state and local taxes as well as Federal Tax) 4. Cash Flow Cash Flow from Assets = Cash flow to creditors + Cash Flow to Stockholders a. Cash Flow from Assets i. Operating Cash Flow ii. Capital Spending iii. Change In Net Working Capital b. Cash Flow to Creditors c. Cash Flow to Stockholders Finance 313 Chapter 2 Outline Richey 5. Study the Example for Dole Cola (36-38)...
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