september 12(1) - Valuations We discuss the topic of...

Info icon This preview shows pages 1–6. Sign up to view the full content.

Valuations We discuss the topic of capital budgeting under the general topic of valuations. What are we determining values of? Companies Projects Product Lines Factories Expansions New Products
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Financial Statements Publicly traded companies required to produce quarterly and annual financial reports – including Balance Sheet, Income Statement, and Statement of Cash Flows. Private Companies are not required to produce all of these reports – just ones needed for tax purposes. However, most do because – (a) lenders will require them, (b) need by owners to see how the company is doing, and (c) the tax requirements are similar to these financial statements so not
Image of page 2
Financial Statements Balance Sheet: shows assets, liabilities, and equity on a specific day. con – book value vs market value only “correct” on one day Backwards looking
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Financial Statements Income Statement – involves revenue and expenses over a period of time Cons – can be “manipulated” legally still looking backwards
Image of page 4
Financial Statements Net Cash Flow (NCF) Net Income (from Income Statement) – Noncash Revenues + Noncash Expenses NOPAT = EBIT (1 – Tax Rate) NOPAT is used to compare operations of companies with different capital structures, or “true” value of operations.
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern