Sample Balance Sheet: Example Company Balance Sheet December 31‚ 2011 ASSETS | | | LIABILITIES | Current assets | | | Current liabilities | | | Cash | $ 2‚100 | | | Notes payable | $ 5‚000 | | Petty cash | 100 | | | Accounts payable | 35‚900 | | Temporary investments | 10‚000 | | | Wages payable | 8‚500 | | Accounts receivable - net | 40‚500 | | | Interest payable | 2‚900 | | Inventory | 31‚000 | | | Taxes payable | 6‚100 | | Supplies | 3‚800
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any action taken by the financial manager that increases risk will cause an increase in value. True or False 4) An action on the part of a firm that increases the level of expected cash flows without a corresponding increase in risk should reduce share value; An action that reduces the level of expected cash flows without a corresponding decline in risk should increase share value. True or False 5) Assuming that economic conditions remain stable‚ any management action that would cause current
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discounted cash flow (DCF In finance‚ discounted cash flow (DCF) analysis is a method of valuing a project‚ company‚ or asset using the concepts of the time value of money. All future cash flows are estimated and discounted to give their present values (PVs) — the sum of all future cash flows‚ both incoming and outgoing‚ is the net present value (NPV)‚ which is taken as the value or price of the cash flows in question. Using DCF analysis to compute the NPV takes as input cash flows and a discount
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in Tables 4.10 and 4.11 do not show free cash flow and financing requirements. These are calculated in Table 1. Note that free cash flow for 2005 is -$2.3 million. But dividends are $2.0‚ so the company will need 2.3 + 2.0 = $4.3 million in outside equity financing. Table 2 shows that the book value of equity is forecasted to grow from $40.71 million in 2004 to $63.31 million at the end of 2010. Table 3 works out earnings‚ dividends and free cash flow for 2011. By that time Reeby Sports should
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paying cash‚ manufacturing the product‚ selling the product and collecting cash. During the payment‚ the cash need occurs. Cash need should be covered by going into a debt. Cash budget is a primary tool in short-term financial planning. It is prepared after the operating budgets (sales‚ manufacturing expenses or merchandise purchases‚ selling expenses‚ and general and administrative expenses) and the capital expenditures budget are prepared. The cash budget starts with the beginning cash balance to which
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ratio of cash to total assets is calculated by following: Figure 1 Proportion of cash and total assets‚ 1976-1981 ($ in millions) | | | | | | | | | 1981 | 1980 | 1979 | 1978 | 1977 | 1976 | Cash | 729.1 | 593.3 | 493.8 | 436.6 | 322.9 | 358.8 | Total Assets | 2‚588.5 | 2‚370.3 | 2‚090.7 | 1‚862.2 | 1‚611.3 | 1‚510.9 | Proportion | 28.2% | 25.0% | 23.6% | 23.4% | 20.0% | 23.7% | According to Figure 1‚ AHP’s cash was about
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Start with the partial model in the file Ch12 P10 Build a Model.xls on the textbook’s Web site‚ which contains the 2013 financial statements of Zieber Corporation. Forecast Zeiber’s 2014 income statement and balance sheets. Use the following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales‚ depreciation to fixed assets‚ cash to sales‚ accounts receivable to sales‚ and inventories to sales will be the same in 2014 as in 2013. (3) Zeiber will not issue any new stock
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P3-1 a) Cash Yasunari Kawabata D.D.S. Capital Sept 1 20‚000 Sept. 4 680 Sept 19 3‚000 Sept. 1 20‚000 Sept 8 1‚690 Sept. 5 942 Sept. 30 6‚007 Sept 20 980 Sept. 10 430 23‚007 Sept. 18 3‚600 Sept. 19 3‚000 Accounts Payable Sept. 30 1‚800 Sept 18 3‚600 Sept. 2 17‚280 Sept. 30 85 Sept. 30 13‚680 Sept. 30 Bal 12‚133
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established that a strong correlation between estimated future cash flows and the value of a firm exists (Copeland et al‚ 1994 ; Brealey and Myers ‚ 2000; Jones‚ 1998 ). In their study of 51 highly leveraged transactions (HLTs) ‚ Kaplan and Ruback (1995) found that the valuations using the DCF methods are within 10%‚ on average‚ of the market value of the transactions‚ providing a strong relation between the market value and discounted cash flow forecasts. In addition‚ they found that the DCF methods
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Interco’s valuation as a whole. 2) As stated by the equity analysts‚ Interco is an over capitalized company with potential to grow‚ which makes an acquisition easy to finance. 3) Interco is also a cash generative target for a potential acquirer as it generates approximately $0.10 of operating cash flow for every dollar of sales. 4) The company is also structured in a way that it could be broken up and sold into its constituent parts‚ which could prove to be worth more than the whole. 2. As a member
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