Please answer all questions. Each part of question 1 is worth 2 points, question 2 is worth 2 points, and question 3 is
worth 4 points (for a total of 10 points).
1. Core concepts question
(a) Write down the general equation for the security market line,
Principles of Finance
FINANCIAL STATEMENT ANALYSIS
Net cash ow : Net income + Depreciation and amortization
Net working capital = NWC = Current assets 7 Current liabilities
Net operating Current assets Non interest bearing
1. Use a spreadsheet program such as excel. Keep all numbers for a particular year in the
2. Prepare two indirect statements of cash flows. One for 2004-2005 and one for 2005-2006.
3. Calculate common sized income statements for each ye