Financial Statements Taxes and Cash Flows n Financial

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Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Assets Building n Accumulated

Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Assets Building n Accumulated Depreciation n $190, 000 - 70, 000 ¨ Liabilities ¨ Equity n Common stock Financial Statements, Taxes and Cash Flow $ 287, 000 1

Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Net working capital Current

Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Net working capital Current assets: definition? n Current liabilities: n Financial Statements, Taxes and Cash Flow 2

Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Income statement n Revenue

Financial Statements, Taxes and Cash Flows n Financial Statements ¨ Income statement n Revenue ¨ n Expenses ¨ ¨ ¨ n When? Depreciation: definition? Dividends? Net Income / Number of Shares = EPS ¨ Trend in EPS Financial Statements, Taxes and Cash Flow 3

Corporate Tax Rates n Calculations ¨ Table 2. 3 ¨ Marginal tax rate Financial

Corporate Tax Rates n Calculations ¨ Table 2. 3 ¨ Marginal tax rate Financial Statements, Taxes and Cash Flow 4

Cash Flow n Cash Flow From Assets ¨ Operating n n n Cash Flow

Cash Flow n Cash Flow From Assets ¨ Operating n n n Cash Flow Revenue - Expenses = Taxable Income - Taxes + Depreciation = Operating Cash Flow Financial Statements, Taxes and Cash Flow 5

Cash Flow n Cash Flow From Assets ¨ Capital n n n Spending Ending

Cash Flow n Cash Flow From Assets ¨ Capital n n n Spending Ending Net Fixed Assets - Beginning Net Fixed Assets + Depreciation Financial Statements, Taxes and Cash Flow 6

Cash Flow n Cash Flow From Assets ¨ Net n n Working Capital Ending

Cash Flow n Cash Flow From Assets ¨ Net n n Working Capital Ending Net Working Capital - Beginning Net Working Capital ¨ Increase in Current Assets ¨ Increase in Current Liabilities Financial Statements, Taxes and Cash Flow 7

Cash Flow n Cash Flow From Assets = Cash Flow to Creditors and Stockholders

Cash Flow n Cash Flow From Assets = Cash Flow to Creditors and Stockholders ¨ Creditors n Decrease in Notes Payable + Interest Expense ¨ Stockholders n Decrease in Common Stock + Dividends Financial Statements, Taxes and Cash Flow 8

Financial Statements, Taxes and Cash Flow 9

Financial Statements, Taxes and Cash Flow 9