L_4_ - Outline Lecture 4 Lecture Organization Balance Sheet...

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Outline Lecture 4 Lecture Organization Balance Sheet (continue) The Income Statement Taxes Cash Flows
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Balance Sheet of The firm (Snap Shot of the Firm-- it’s health)
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Liquidity of Assets The order of assets on the balance sheet reflects their liquidity. Liquidity Liquidity has an opportunity cost
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Market Value versus Book Value Book Value of Assets is not necessarily equal their Market Value (especially, for old assets)
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Market Value versus Book Value Some of the most important assets and liabilities do not appear on the balance sheet:
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Income Statements The income statement The income statement Income = Revenue - Expenses Mismatch
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Cash Flow Example Income Statement Sales $2000 Costs 1400 Depreciation 100 EBIT Interest Taxable Income Taxes (50%) Net Income Dividends Add to Retained Earnings
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THE INCOME STATEMENT Noncash Items (Depreciation)
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Economic life and useful life of an asset The distinction between the economic life the useful life of an asset the economic life of an asset the useful life of an asset
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The Concept of Cash Flow Cash flow
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This note was uploaded on 06/22/2011 for the course FINA 365 taught by Professor Koch during the Spring '08 term at South Carolina.

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L_4_ - Outline Lecture 4 Lecture Organization Balance Sheet...

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