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Unformatted text preview: Buying treasury stock will decrease OE: Co. wants ROE to be good so they buy treasury stock to decrease OE Indirect approach (only concerns operating): o Start w/ NI o List of adjustments Direct approach: o Preferred by banks giving loans o Not preferred by co. management though o Ex. why, in 2009, is Xerox not spending excess cash from operating on investing and financing? Not a ton of answers, but many questions To create SCF: o B/S w/ 2 years information and I/S w/ 1 year needed o From B/S: Calculate change from year-to-year What activity does it go in (operating?, investing?, financing?) Things labeled cash: All O,I,F changes should add up to the cash changes Make SCF common-size: o Put all inflows together o Put all outflows together For operations, only put one-line (the final total/ bottom line)...
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This note was uploaded on 06/10/2011 for the course BUSI 407 taught by Professor Bowen during the Spring '11 term at UNC.
- Spring '11