Qantas | 2007 | 2008 | 2009 | 2010 | 2011 | Revenue | 15060 | 15627 | 14552 | 13772 | 14894 | Net income($M) | 673 | 970 | 123 | 116 | 249 | Net profit margin | 4.48% | 6.23% | 0.85% | 0.84% | 1.67% | × Asset turnover | 0.77 | 0.79 | 0.73 | 0.69 | 0.71 | = ROA | 3.45% | 4.92% | 0.61% | 0.58% | 1.19% | × Financial leverage | 3.45 | 3.44 | 3.49 | 3.34 | 3.40 | = ROE | 11.93% | 16.91% | 2.13% | 1.94% | 4.05% | NOPAT margin | 6.48% | 8.72% | 1.40% | 1
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FOUNDATION OF FINANCE (BWFF1013) FIRST SEMESTER 2012/2013 (A121) CHAPTER 2-FINANCIAL STATEMENT AND CASH FLOWS Section A Please circle TRUE or FALSE to the following statements. 1) An income statement reports a firm’s cumulative revenues and expenses from the inception of the firm through the income statement date. Answer: FALSE 2) A firm’s income statement reports the results from operating the business for a period of time‚ while the firm’s balance sheet provides a snapshot of the firm’s
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is the appropriate classification in the statement of cash flows in the company’s December 31‚ 2010‚ financial statements for its purchase of 2012 EAs from Clean Air Corp ? According to the FASB codification section 805-50-3-1-2‚ these allowance will be recognized as intangible assets at their cost. When a company buys any assets‚ the cash outflow due to purchase will be classified in the investing section of the statement of cash flows. Standard Accounting Entry for Purchase DR CR
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compute the net present value of both products. In order to start‚ he needs to find the operating cash flows of each machine. The yearly operating cash flows are based on how much the machines will save‚ the costs they will incur each year‚ and the depreciation tax shield. The new machine will have a yearly operating cash flow of ($13‚724.67) and last eight years. The old machine will have an operating cash flow of ($179‚869.87) and last six years. He also needs to consider the initial outlay of
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annual cash flows resulting from the Lazy Mower project. a) What is the year zero or project cost? Investment in Working Capital | -900‚000 | Capital Investment | -20‚000‚000 | Total Cash Flow | -20‚900‚000 | b) What are the annual operating cash flows? Whole bottom line c) What are the terminal cash flows? Depreciation amounts Salvage value + operating cash flow 2) Calculate the project’s NPV‚ IRR and Cash Payback. IRR= 61% NPV= $11‚051‚576 Cash Payback=
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capital (spare parts inventory) of $4‚000. The spectrometer would have no effect on revenues‚ but it is expected to save the firm $25‚000 per year in before-tax operating costs‚ mainly labor. The firm’s marginal federal-plus-state tax rate is 40%. a. What is the net cost of the spectrometer? (That is‚ what is the Year-0 net cash flow?) The net cost is -$89‚000: Price = ($70‚000) Modification = (15‚000) Change in NWC = (4‚000) ($89‚000) =======
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Chapter 9 Operating Exposure T Questions By any other name Operating exposure has other names 1. What are they‚ and what do the words in these names suggest about the nature of operating exposure? Economic exposure emphasizes that the exposure is created by the economic consequences of an unexpected exchange rate change. Economic consequences‚ in turn‚ suggests that the impact is due to the response of external forces in the economy‚ rather than‚ say‚ something directly under the control
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THE ELEMENTS OF A CASH FLOW PROJECTION A capital budgeting decision is characterized by costs and benefits (cash flows) that are spread out over several time periods. This leads to a requirement that the time value of money be considered in order to evaluate the alternatives correctly. Although in actual practice we must consider risk as well as time value‚ to situations in which the costs and benefits (in terms of cash) are known with certainty. There are sufficient difficulties in just taking
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Plan of Analysis fA l i Identify th l Id tif the relevant cash flows related to: t h fl l t dt F FCF Capital Expenditures (CAPEX) Change in Net Working Capital (∆NWC) Operating Cash Flow (income statements) Discount each year’s free cash flow (FCF) Find Fi d NPV b summing di by i discounted FCFs t d FCF Accept or reject the project 3 Baldwin: B ld i CAPEX & ∆NWC 1 2 3 4 5 6 Incremental Cash Flows Capital Spending: Test marketing study (sunk cost) Bowling
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1. Why did regulators take a closer look at Demand Media’s accounting? Demand Media capitalizes the fees paid to freelance writers over five years instead of expensing the costs as incurred. Typically‚ web media companies expense content creation costs as incurred. Demand’s unorthodox approach to accounting for writer expenses as acquiring and amortizing intangible assets spreads Demand Media’s expenses over time and reduces its current losses on its income statement. Thus‚ Demand Media’s accounting
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