This website uses cookies to ensure you have the best experience. Learn more

1231231321313 Essay

5106 words - 21 pages

Chapter 7
Accounting for Financial Management

7-1 The balance sheet shows the assets, along with the sources of funds used to acquire the assets, at a point in time, say 12/31/12. The income statement shows the sales and profits that were produced during an interval of time, say the year 2012. An individual would have assets, and a net worth, and a balance sheet would detail these holdings. The individual would also have income and expenses, and his or her income statement would detail these ...view middle of the document...

c. The stock market collapse had serious economic consequences. First, companies had a hard time raising new equity capital, and that restricted growth. Second, individuals who saw their portfolios decline were worried and thus spent less, and that put a further drag on the economy. In general, a strong economy needs good capital markets, and that can occur only if investors can obtain good information about the companies whose securities they are buying.

7-3 In essence, the statement of cash flows strips out non-cash charges that are shown on the income statement and ends up showing the surplus or deficit of cash generated during the year. For example, depreciation and amortization charges reduce net income, but they are non-cash charges, so they are added back when constructing the statement of cash flows. Since cash is what’s available to companies to spend or pay out to investors, the cash flow statement is quite important, especially after Enron.

7-4 Net income is the reported after-tax accounting profits, and EPS is net income divided by the number of shares outstanding. (If options are outstanding, the number of shares used to find EPS may be adjusted to reflect EPS after options have been exercised.) EBITDA is operating income before interest, taxes, depreciation, and amortization. This number is especially important to banks and other creditors because it is an approximation to the cash flow being generated from operations that is available to make payments on debt. NOPAT is net operating profit after taxes. It is found as EBIT(1-T), and it shows how much after-tax operating profit the firm would generate if it had no debt. Free cash flow is the cash flow available to investors after the firm has paid its taxes and made all investments in fixed assets and working capital necessary to sustain operations going forward. FCF = (NOPAT + Depreciation) – Gross investment in operating assets = NOPAT – Net investment in operating assets. MVA is the market value of the stock minus the book value, and it shows how much value management has added since the firm’s inception. EVA is economic value added, and it is found as EVA = EBIT(1-T) – (operating capital)(WACC). EVA shows how much management has added to the firm’s value through operations during a specific year. MVA is sometimes used to measure management’s performance and as a basis for long-run compensation to the top managers. EVA can be measured on a divisional basis, and it is used as a basis for annual incentive compensation plans.

7-5 Regular accounting statements reported the combined results generated from operating and non-operating assets (such as marketable security holdings), and cash and non-cash items are mixed. Management is interested in separating out operating results, and in cash flows as well as accounting income. So, the accounting statements are modified to produce information that is more useful to managers.

7-6 Free cash flow shows the...

Other Papers Like 1231231321313

Jail Responsibilities Essay

589 words - 3 pages Jail Responsibilities Monique Priorello September 23, 2012 One of the main responsibilities of a jail is to give the officers the correct “Police Correspondence” courses. This is because these courses give the officers the effective basic training that they need to do things such as; Writing of Memoranda, Police Reports, and Civilian Letters. What needs to be done first is make sure that there are NO errors. This means in

Mgt330 Essay

638 words - 3 pages Starbucks Nefertiti Wright Sangita Patel October 15, 2012 STARBUCKS 2 STARBUCKS - 1 - [no notes on this page]I. Job description a. Baristas II. Job specifications a. Duties III. Form of departmentalization STARBUCKS 3 Starbucks Starbucks have been named in the 100 best companies to work for. Starbucks has many job opportunities for people, which require the right job specifications. The employees create uplifting experience

Fight Club

917 words - 4 pages Fight Club is a story of the narrator’s struggle to gain control over his life. He is in search for an identity in the form of manhood. His masculinity is so repressed because of the absence of a father figure in his life. Because of this he creates Tyler, his alternate personality. Tyler is nothing like anyone the narrator has met, he is self assured and completely free. The narrators alternate personality Tyler Durden is the ultimate alpha-male

The Powers Of The Health And Safety Representative

254 words - 2 pages The Powers of the Health and Safety Representative A health and safety representative has the power to: Identify Workplace Hazards The health and safety representative has the power to identify workplace hazards. This power is usually exercised by conducting workplace inspections. Obtain Information from the Employer The health and safety representative is entitled to the same information available to a joint committee member. Under the Act

Lesson Plan

6476 words - 26 pages QWERTYUIOP by Vivien Alcock Table of Contents Introduction About Short Stories The Writer Synopsis Elements Activities Beyond The Text Assessment Answer Key Glossary Panel of Writers [pic] SHORT STORY Welcome to the World of Literature and to Short Stories! We hope you will enjoy working with this guidebook, which has been specially designed to help you prepare your students enjoy the Literature


1227 words - 5 pages Coca-Cola Global Business and Marketing Strategy Introduction As domestic markets mature, it is becoming more and more fashionable for organisations to seek growth through opportunities in foreign countries. Faster communication, new technologies and improved transport links are making international markets more accessible and businesses pursuing a global position can experience an upsurge in brand awareness and cost effectiveness. Global

Facing Poverty With A Rich Girl's Habit

783 words - 4 pages Facing poverty with a rich girl’s habit Adele Strader Professor Chryst English Composition October 22, 2012 Facing poverty with a rich girl’s habit was written by Suki Kim and published in the New York Times on November 21, 2004. The most important point that Suki want to make was that (1) what we have in life can be taken away in an instant (2) do not go bankrupt in South Korea (3) that a person must adapt and endure

3-4-50 Paper

572 words - 3 pages -4-50 paperLack of exercise is a key contributor to disease and death among many people in the United States, regardless of age. It is a well-known fact that exercise results in a healthier lifestyle. Along with tobacco use and poor nutrition, lack of exercise is one of the main issues that people have which leads to high blood pressure, obesity, and other serious health problems. According to a study by UCSD School of Medicine and SDSU


836 words - 4 pages Miguel Beatrice Capitalism is an economic system in which private individuals and business firms carry out production and exchange of goods and services through complex transactions involved in prices and markets. By extension called capitalist higher social class of this economic system ("bourgeoisie"), or to the common form would the individual interests of capital owners in both companies, shareholders and patterns, also called capitalism


1177 words - 5 pages Homelessness in America Homelessness in America is a social problem that we are faced with on a daily basis. Despite the vast number of research done by Americans on homelessness, little is still known about the effect that it has on our society. The overall image that emerges from the effects of homeless people

Mental Health Community Service Essay

509 words - 3 pages Ladesca Smith Nursing 162 Community Volunteer Service Assignment Why you chose this agency? I chose this Sharing God’s Love, because I was interested in what kind of services they provide. I also wanted to know if there was any help out there for the people in need with mental illnesses. I also had lots of my kid’s old clothing that I needed to get rid of, so I donated it to them. Describe the population the agency serves. The

Related Essays

Lafarge S.A Essay

2924 words - 12 pages NAME: IHEKANANDU KINGSLEY N. COURSE: MGMT 292 / F12 N01 TITLE: INDIVIDUAL CASE STUDY (LAFARGE S.A.) SUBMITTED: October 5, 2012 TABLE OF CONTENTS 2. INTRODUCTION 3 3. DESCRIPTION OF CASE 4 4. VALUES 4 4.1. Types of values 4 5. TEAMWORK 7 6. MOTIVATION 8 7. CREATIVITY 9 7.1. Components of creativity 9 8. CONCLUSION 12 9. BIBLIOGRAPHY 13 INTRODUCTION This report aims to provide an in-depth analysis of initiatives pursued by Lafarge as

Finance Essay

665 words - 3 pages Financial statements are the most common tool used for making business decisions. They consist of the balance sheet, income statement and statement of cash flows. The analysis tools used affect all aspects of a company not just a few. A systematic review of the resources a company used to achieve its mission is cost control. Cash flow should be kept at necessary levels for operations is one of the major benefits of cost control. It is a very

Analysis Of Operation Blue Star And Its Effects On The Gandhi Dynasty

934 words - 4 pages The period of time including and following Operation Blue star is considered a dark time in India and black spot in Indian history. It is a time Indian would rather forget, yet still to this day debate about. Was Indihar Gandhi correct in instating operation Blue Star, inflicting damage to the Golden temple, and being responsible for the killing of anywhere from 492 (official reports) to 1500 (estimates run as high as) civilians, which lead to an

Regretful Decisions Essay

930 words - 4 pages Regretful Decisions There are many individuals in a child’s life that helps mold them into a well-rounded adult. In most cases, this guidance comes from the child’s parents or other older, but in Sonny’s case, this guidance was expected from his older brother. In the short narrative, Sonny’s Blues, Sonny’s life was adversely affected by the decisions that his older brother made. The decisions that his brother made include leaving Sonny to stay