LECTURE2

LECTURE2 - Lecture 2 Lecture Accounting statements and Cash...

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Lecture 2 Lecture 2 Accounting statements and Cash flows Balance Sheet Balance Sheet Income Statement Income Statement Financial Cash Flow Financial Cash Flow
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Balance Sheet Components of balance sheet Current assets Fixed assets ( tangible ) ( intangible ) Current liabilities Long-term debt Shareholder’s equity Net working capital Assets Assets = = Liability Liability + + stock holder’s stock holder’s Equity Equity Snapshot of firm’s accounting value at a particular date
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Balance Sheet (continue) Assets are listed in the order of accounting liquidity Liabilities and equity are listed in the order in which they must be repaid Debt service is contracted payments of principle and interest on debt - put the firm in default if not paid Accounting value ( historical cost of assets) does not reflect market value of assets Many valuable assets do not appear in the balance sheet : - good management practice , good reputation , etc.
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[Table 1] Balance Sheet of US Composite Corp. 19x2 and 19x1 ($million) 19X2 19X1 Assets 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, equipment 1423 1274 Less accumulated depreciation -550 -460 Net property, plant, equipment 873 814 Intangible and other assets 245 221 Total fixed assets 1118 1035 Total assets 1879 1742
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This note was uploaded on 12/20/2011 for the course ECON 448 taught by Professor Bejan during the Spring '06 term at Rice.

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LECTURE2 - Lecture 2 Lecture Accounting statements and Cash...

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