lecture 07 - Business Finance Lecture 7 Review of the...

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35 Business Finance Lecture 7 Review of the Previous Lecture Balance Sheet Income Statement Financial Cash Flows Cash Flow From Assets Cash Flow to Creditors Cash Flow to Stockholders Topics under Discussion Cash Flow Statement Financial Statements Analysis Common Size Analysis The Statement of Cash Flows There is an official accounting statement called the statement of cash flows. This helps explain the change in accounting cash, The three components of the statement of cash flows are Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities The Balance Sheet of the XYZ Corporation (in $ millions) 20X2 and 20X1 Balance Sheet XYZ CORPORATION Assets 20X2 20X1 Current assets: Cash and equivalents $140 $107 Accounts receivable 294 270 Inventories 269 280 Other 58 50 Total current assets $761 $707 Fixed assets: Property, plant, and equipment $1,423 $1,274 Less accumulated depreciation -550 -460 Net property, plant, and equipment 873 814 Intangible assets and other 245 221 Total fixed assets $1,118 $1,035 Total assets $1,879 $1,742
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36 The Balance Sheet of the XYZ Corporation XYZ Corporation Income Statement (in $ millions) 20X2 and 20X1 Balance Sheet XYZ CORPORATION Liabilities (Debt) and Stockholder's Equity 20X2 20X1 Current Liabilities: Accounts payable $213 $197 Notes payable 50 53 Accrued expenses 223 205 Total current liabilities $486 $455 Long-term liabilities: Deferred taxes $117 $104 Long-term debt 471 458 Total long-term liabilities $588 $562 Stockholder's equity: Preferred stock $39 $39 Common stock ($1 per value) 55 32 Capital surplus 347 327 Accumulated retained earnings 390 347 Less treasury stock -26 -20 Total equity $805 $725
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