350-02a_note[1]

350-02a_note[1] - 350-02a_note, 11S TOPIC 2: FINANCIAL...

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350-02a_note, 11S Page 1 of 7 TOPIC 2: FINANCIAL STATEMENTS, CASH FLOW, AND TAXES (CHAPTER 3) I. Outline A. Key Financial Statements 1. Balance sheet 2. Income statements 3. Statement of retained earnings 4. Statement of cash flows B. Accounting income vs. cash flow C. Federal tax system II. Homework Assignment Chapter 3 Question 1-7, 9-10 Problem 1, 5-8, 10 ================================================================ Class Notes I. Key Financial Statements A. Introduction: 1. Balance sheet – provides a snapshot of a firm’s financial position at one point in time. 2. Income statement – summarizes a firm’s revenues and expenses over a given period of time. 3. Statement of retained earnings – shows how much of the firm’s earnings were retained, rather than paid out as dividends. 4. Statement of cash flows – reports the impact of a firm’s activities on cash flows over a given period of time.
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350-02a_note, 11S Page 2 of 7 B. Balance Sheet: (Case A) 1. Statement & Impact on Cash 2008 2007 Non-cash Item Impact on Cash Cash category Assets Cash 7,282 57,600 NA NA AR 632,160 351,200 Operating Inventories 1,287,360 715,200 Operating Total CA 1,926,802 1,124,000 Gross FA 1,202,950 491,000 Investing Less: Acc. Dep 263,160 146,200 Operating Net FA 939,790 344,800 Total Assets 2,866,592 1468,800 Liabilities and Equity AP 524,160 145,600 Operating Notes Payable 636,808 200,000 Financing Accruals 489,600 136,000 Operating Total CL 1,650,568 481,600 LT debt 723,432 323,432 Financing Total Liability 2,374,000 805,032 Common Stock 460,000 460,000 Retained earnings RE 32,592 203,768 Total Equity 492,592 663,768 Total L+E 2,866,592 1468,800 a) Net Working Capital (NWC) = CA - CL b) Net Operating Working Capital (NOWC) = CA – Non-interest bearing CL = C A ( A P + A c c r u a l s ) (1) Correction: Change NWC in the textbook to NOWC. Textbook P. 60 Homework Solution: P3.7, P3.10
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350-02a_note, 11S Page 3 of 7 C. Income Statement 2008 2007 Sales 6,034,000 3,432,000 COGS 5,528,000 2,864,000 Other Expenses 519,988 358,672 EBITDA (13,988) 209,328 Depreciation & Amortization 116,960 18,900 EBIT (Operating Income) (130,948) 190,428 Interest Expense 136,012 43,828 EBT (Gross Income) (266,960) 146,600
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This note was uploaded on 09/30/2011 for the course FIN 350 taught by Professor Chen during the Spring '07 term at S.F. State.

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350-02a_note[1] - 350-02a_note, 11S TOPIC 2: FINANCIAL...

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