Yifang Liu
704136459
1.
Apple Inc.
Tesla
Cash Holdings
(Million)
3612.00
2370.74
Long Term
Debt (Million)
28987.00
1848.80
Equity (Million)
111547.00
958.09
Revenue
(Million)
182795.00
851.80
Net Income
(Million)
39510.00
74.71
I cannot compare the finan
PORTFOLIO ANALYSIS:
Average and Geometric Return: R = (R1 +. + RT ) ! =
T
!
1 + !1
1 + !2 (1 + ! ) 1 . If we can assume
that the returns are normally distributed, than we can make future predictions just by using the average and
the standard deviati
Homework 1
1.
Netflix data taken from Jan 1 2015 to June 30, 2015 (6 months ended)
Netflix Financials
Cash Holdings
Long Term
Debt
Equity
Revenue
Net income
Company I:
$8,211,000,000
Coca Cola
$26,087,000,00
$10,711,000,00
$29,087,000,000
$1,566,000,000
0
HW 5
1. a)
Salvage value = Market value (Market valueBook value)*tax rate
Salvage value = 1,000,000(10000000)*0.38 = 620,000
Year
Sales
Operating Costs
Depreciation
EBT
Tax
Net Income
Added Depreciation
Operating Cash Flow
Change in Net Working
Capital
Week 4 Discussion Solutions
Exercise 1:
Syed's Industries has accounts receivable of $700, inventory of $1,200, sales of $4,200, and
cost of goods sold of $3,400.
How long does it take Syed's to both sell its inventory and then collect the payment on the
Balance Sheet and
Income Statement
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Financial Statements
There exists many financial statements
Of the mix, there are 4 important ones:
Balance Sheet (Statement of Fina
Week 6 Discussion Solutions
Exercise 1:
Suppose we can make an investment that pays $5000 in 2 years given that the investment
costs $4000.
Market rate is 10%.
Should we invest?
Solutions to Exercise 1:
F V = P V (1 + i)n
5000 = 4000 (1 + i)2
i = sqrt (50
Financial Ratios
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Financial Ratios
Financial Ratios: is a form of financial statement analysis that gives quick indication of
a firm's financial performance in several
Week 7 Discussion Solutions
Exercise 1:
Part 1:
Suppose we make an investment we are are promised to get $30000 in present dollars 5 years
from now. The payments are made monthly for with a 4% APR. What is the monthly payment
amount?
Part 2:
Now instead w
Financial Planning
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Financial Planning
Financial planning often involves making decisions on how to manage a companys resources:
Capital Budgeting
Capital Structuring
N
Week 8 Discussion Solutions
Exercise 1:
Given that initial investment is $1,500 million (year 1) and sales and
production span the next 5 years (year 26). Compute the NPV.
Assume straight line depreciation.
Variable
Expected (Best)
Market Size
10,000
Mar
Project Evaluations
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Project Evaluation Basics
A project cash flow should be treated on a whatifthisexisted basis.
Important Terms:
Sunk Costs: costs that already oc
HOMEWORK 6  QUESTION 1(errata: in an earlier version of this file column R was no
Current Average Daily Ride
Current Price per Ride
Random
Variable
0.639
0.296
0.598
0.657
0.417
0.107
0.170
0.130
0.565
0.189
0.852
0.049
0.300
0.185
0.760
0.306
0.305
0.20
Market Value Measures
Market Capitalization = Price per share * # Shares Outstanding
P/E Ratio = Price Per Share / Earnings Per Share
Market to Book Ratio = Market Value per Share / Book Value per Share
External Financing
Formulas
EFN =
Bond Valuation
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Bonds Basics
Bonds: certificate that shows that a borrower owes a specified sum
the borrower has agreed to make interest and principal payments on desig
NUMERIC PORTFOLIO EXAMPLE:
You have $100 in your pocket. You would like to invest on a portfolio of stock A and B.
You collected data on stock A and B returns and found the expected returns and standard
deviations as follows:
E(rA) = 5%, E(rB) = 10%,
BALANCE SHEET (in thousand $)
Company B
Current Assets
Cash
Short Term Investments
Net Receivables
Inventory
Other Current Assets
Total Current Assets
Long Term Investment
Property, Plant, Equipment
Other Assets
TOTAL ASSETS
Current Lia
Final Coverage:
Textbook, 10th Edition, Chapters 1 through 11.
The following sections and topics are not covered in class, therefore, you are not
going to be tested on them:
EXCEPT:
1.6 Regulation
2.6 The Accounting Statement of Cash Flow
Risk and Return
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Dollar Returns
Dollar Return: the amount of money you make from an investment
Generally speaking our return on an investment is our capital gains or lo
Income Statement and
Cash Flows
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Financial Statements
There exists many financial statements
Of the mix, there are 4 important ones:
Balance Sheet (Statement of Financi
Financial Planning Pro Forma Statements  Percentage of Sales Approach
General points to keep in mind in financial planning:

General economic atmosphere will affect the future sales. Some industries are prone to
Return & Risk: CAPM
Variance & Covariance
In a large portfolio the variance terms are effectively diversified
away, but the covariance terms are not.
Diversifiable Risk;
Nonsystematic Risk; Firm
Specific Risk; Unique Risk
Covariance
Portfolio risk
Nondiv
Week 10 Discussion Solutions
Exercise 1:
Beaksley, Inc. is a very cyclical type of business which is reflected in its dividend policy.
The firm pays a $2.00 a share dividend every other year.
The last dividend was paid last year.
Five years from now, the
Week 9 Discussion Solutions
Exercise 1:
L.J.'s Toys Inc. just purchased a $390,000 machine to produce toy cars.
The machine will be fully depreciated by the straight line method over its fiveyear economic life.
Each toy sells for $25. The variable cost p
Week 5 Discussion Solutions
Exercise 1:
The most recent financial statements for Bradley, Inc. are shown (no income taxes):
Income statement
Balance sheet
Sales
$ 5,700
Assets
$14,100
Debt
$ 6,300
Costs
$3,820
Equity
7,800
Net income $1,880
Total
$14,100
Portfolio Analysis
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Risk
With return generally you need to also talk about risk
Risk: the chance that an investment's actual return will be different than expected
Risk
Cash Flow Analysis and
Financial Ratios
ENGR 111: Technology Management and Finance for
Engineers
Alex Wong <[email protected]>
Business Cash Flows
Business Cash Flows refers to the changes in:
Assets
Liabilities
Stockholders Equity
Just as the balance sh