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Chapter 02 excel master

# Chapter 02 excel master - Ross Westerfield and Jordan's...

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by Brad Jordan and Joe Smolira Version 9.0 Chapter 2 In these spreadsheets, you will learn how to use the following Excel functions: The following conventions are used in these spreadsheets: 1) Given data in blue 2) Calculations in red NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analysis ToolPak" and "Solver Add-In," then click "OK." Ross, Westerfield, and Jordan's Spreadsheet Master Fundamentals of Corporate Finance, 9th edition Cell formatting Trace Dependents/Precedents VLOOKUP Referencing across worksheets

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Chapter 2 - Section 1 The Balance Sheet Example 2.1: Building a Balance Sheet RWJ Excel Tip Given the following information, what does the balance sheet look like? What is shareholders' equity? What is net working capital? Current assets: \$100 Net fixed assets: \$500 Short-term debt: \$70 Long-term debt: \$200 RWJ Excel Tip Assets Liabilities & Shareholders' Equity Current assets \$100 Current liabilities \$70 Fixed assets 500 Long-term debt 200 Shareholders' equity 330 Total liabilities and Total assets \$600 shareholders' equity \$600 Net working capital = Current assets - Current liabilities Net working capital = \$30 Many of the examples in this chapter deal with the fictitious U.S. Corporation. The balance sheet for the company is below. RWJ Excel Tip Assets Liabilities and Owner's Equity 2008 2009 2008 2009 Current assets Current liabilities Cash \$104 \$160 Accounts payable \$232 \$266 Accounts receivable 455 688 Notes payable 196 123 Inventory 553 555 Total \$428 \$389 Total \$1,112 \$1,403 Long-term debt \$408 \$454 Fixed assets Net plant and Owner's equity equipment \$1,644 \$1,709 Common stock and paid-in surplus \$600 \$640 Retained earnings 1,320 1,629 Total \$1,920 \$2,269 Total liabilities and Total assets \$2,756 \$3,112 owner's equity \$2,756 \$3,112 RWJ Excel Tip We will be using this balance sheet in future calculations. Example 2.2: Market Value versus Book Value We are given the following information on Klingon Corporation: Book value of fixed assets: \$700 Market value of fixed assets: \$1,000 Book value of net working capital: \$400 Market value of net working capital: \$600 Book value of long-term debt: \$500 Market value of long-term debt: \$500 Below we have both the book value and market value balance sheets for Klingon Corporation. Assets Liabilities and Owner's Equity Book Market Book Market Net working capital \$400 \$600 Long-term debt \$500 \$500 Net fixed assets 700 1,000 Shareholders' equity 600 1,100 Total liabilities and Total assets \$1,100 \$1,600 owner's equity \$1,100 \$1,600 RWJ Excel Tip Spreadsheets are a very useful way to do financial calculations. Throughout these spreadsheets, we will use Excel to perform most of the calculations that are presented in the textbook. However, using Excel or any spreadsheet program is not a substitute for understanding the underlying calculations. The old adage "Garbage in - Garbage out" definitely applies to spreadsheets. You should realize that you do not need to understand these spreadsheets to understand Finance, but it is a useful tool for calculations.
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Chapter 02 excel master - Ross Westerfield and Jordan's...

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