...Meghan Michel 9/8/2015 Finance 403 Chapter 6 Mini Case a. What effect did the expansion have on sales and net income? Sales increased 70% off of the $3,432,000 in 2014 to $5,834,000 in 2015. Revenue went up by 2.4 million dollars but cost of goods sold went up by 2.1 million dollars therefore it is of no surprise that EBIT fell Net income fell from $87,960 to ($95,136) despite the 70% increase in sales due to the 2.6 million dollar increase in total operating expenses. What effect did the expansion have on the asset side of the balance sheet? Assets nearly doubled from $1,468,800 to $2,886,592, and net fixed assets increased by $594,990 from $344,800 to $939,790. The purpose of increasing assets is to generate more revenue, but in this case Computron did not generate enough to justify the investments. The inventory rose from $715,200 to $1,287,360 and accounts receivable almost doubled increasing to $632,160 in 2015 from 2014’s $351,200. What effect did it have on the liabilities and equity? The financing needed for the expansion caused the current liabilities to increase from $481,600 to $1,328,960. Long term debt increased to help with financing but no new stocks were issued b. What do you conclude from the statement of cash flows? This statement of cash flows shows the impact of buying and selling fixed assets, cash transactions with shareholders, and the borrowing and repaying lenders to pay for the expansion. Although sales nearly doubled, it still was not...
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...Aula 1 - Chapter 1 quinta-feira, 19 de julho de 2012 15:04 • Overview of Financial Management and the Financial Environment ○ Objetivo de uma empresa: Maximizar riqueza (riqueza ≠ lucro) ○ Razão de uma empresa: viabiliza um lucro que o acionista não conseguiria sozinho ○ Topicas in this Chapter: Forms of Business Organization Objective of the firm: Maximize Wealth Determinants of fundamental value Financial securities, markets and institutions ○ Corporate financce provides the skills managers need to: Identify and select the corporate strategies and individual projects that add value to the firm. Forecast the funding requirements of the company, and devise strategies for acquiring those funds. *Finanças: - Avaliar a proposta de valor dos projetos (análise de viabilidade) - Buscar dinheiro para as estratégias e propostas (captação de recursos) ○ Becoming a Public Corporation and Growing Afterwards: Initial Public Offering (IPO) of stock □ Raises Cash □ Allows founders and pre-IPO investors to "harvest" some of their wealth Subsequent issues of debt and equity ○ Agency Problems and Corporate Governance: Agency Problem: managers may act in their own interest and not on behalf of owners (stockholders) Corporate Governance is the set of rules that control a company's behavior toweards its directors, managers, employees, stockholders, creditors, costumers, competitors and the community. Corporate Governance can help control agency problems. *Comportamento ético...
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...receivable+Inventories = $7,282 + $632,160+$1,287,360 =$1,926,802 The operating current liabilities=Accounts payable + Accruals = $324,000 + $284,960 =$608,960 The net operating working capital=Operating current assets-Operating current liabilities =$1,926,802-$608,960 =$1,317,842 The total net operating capital=NOWC+Operating long-term assets =$1,317,842+$939,790 =$2,257,632 e. FCF=NOPAT-Net investment in operating capital =EBIT(1-T)-(Net investment in operating capital in 2010-Net investment in operating capital in 2009) =$17,440(1-0.4)-($2,257,632-$1,138,600) = -$1,108,568 f. ROIC=NOPAT/Total net operating capital =($10,464/$2,257,632) =0.0046 =0.46% g. EVA=Net operating profit...
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...Formula Sheet: FINA4200 Midterm 1 Modifying Accounting Statements New Balance of retained earnings = Previous Balance + Net Income – Common Dividends = Previous Balance + Addition to Retained Earnings Net Cash Flow = Net Income + Depreciation and Amortization Operating Current Assets = Cash + Accounts receivable + Inventories Operating Current Liabilities = Accounts payable + Accruals Net Operating Working Capital (NOWC) = Operating Current Assets – Operating Current Liabilities Total Net Operating Capital (TNOC) = Net Operating Working Capital + Long-term Assets NOPAT = EBIT * (1 – Tax Rate) Free Cash Flow (FCF) = NOPAT - Net investment in operating capital Return of Invested Capital (ROIC) = NOPAT / Total Net Operating Capital Economic Value Added (EVA) = NOPAT- WACC * Total Net Operating Capital Market Value Added (MVA) = Market Value of stock - Book Value of Common Equity Financial Ratios Current Ratio = Current Asset / Current Liabilities Quick Ratio = (Current Asset – Inventory) / Current Liabilities Inventory Turnover Ratio = Sales / Inventory Days Sales Outstanding (DSO) = (Account Receivable/ Sales) x 365 Fixed Asset Turnover Ratio =Sales/Fixed Assets Total asset Turnover Ratio = Sales/Total Assets Debt Ratio=Total liabilities/Total assets Time-Interest-Earned (TIE) Ratio =EBIT/Interest expense 1 EBITDA coverage ratio = (EBITDA + Lease payment) / (Interest Expense + Principle payment + Lease payment) Profit Margin = Net Income / Sales Basic Earning Power...
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...Chapter 2: ANSWERS TO END-OF-CHAPTER QUESTIONS 2-1 The four financial statements contained in most annual reports are the balance sheet, income statement, statement of retained earnings, and statement of cash flows. 2-2 No, because the $20 million of retained earnings would probably not be held as cash. The retained earnings figure represents the reinvestment of earnings by the firm. Consequently, the $20 million would be an investment in all of the firm’s assets. 2-3 The balance sheet shows the firm’s financial position on a specific date, for example, December 31, 2002. It shows each account balance at that particular point in time. For example, the cash account shown on the balance sheet would represent the cash the firm has on hand and in the bank on December 31, 2002. The income statement, on the other hand, reports on the firm’s operations over a period of time, for example, over the last 12 months. It reports revenues and expenses that the firm has incurred over that particular time period. For example, the sales figures reported on the income statement for the period ending December 31, 2002, would represent the firm’s sales over the period from January 1, 2002, through December 31, 2002, not just sales for December 31, 2002. 2-4 The emphasis in accounting is on the determination of accounting income, or net income, while the emphasis in finance is on net cash flow. Net cash flow is the actual net cash that a firm generates during some specified period...
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...£It ~ ~1 n ~v viG1lv'W £ '::I15rn1 l.tJ'5~lih.lij&lFhtfUil,)jf\lGi'1t1'l6 FCF -( Vll NPV U'UL£lv G1£lvVll 1. CF (CIF/COF) 2.Discount Rate (WACC) 5~t1~L1m l.lnmn'::lnl5ii£l1£!~'U~ilGf Gi/t~Gi rn .('3. 4.IV G1'::11n1.l5~lJlrnnl5'::11nv1J P&L t:l1L'::IVl£rt'l%Format G11'U~lv Operating 0 1 income 9 LL'Wvni151mVlfl1:t{j ,... ."" ( ('I p'l ) PV Net Cashflow - Total Debt -:jl'U1'Ulf'U~vVllJ~ LL~~vi151mlf'Ut'U~~1~Over Value l 51mlf'Ut'U~~1~ ____ .J'_.d)_o____ LL'Wv/t~oli£l ':2 1\/ -! .!i! .. ~ y_.d)_. I _..:ii_Vl_v --_-.-, y g >- ks ~ o~\.r •.••(\c:.'-'t-'I ••...• u vJ~k/ . 3.t1'ittiiUijilFh\fU&l1~fYGl'1t1 Relative Valuation tl'i~Ljj'U1;!~~1t{'U~1£..1 PIE Ratio PE ratio \1'1£) Price - Earning Ratio - PIE \1'1£) PER UlJi1LtI'U1fivlJl£..1v1~~U~1L'Unl'itl'i~Ljj'U1;!~~1t{'UvlL'il~'UL';j P E Ratio ~G'l'i lJ£)ni1 'il~1t{'UL'UGl~1~Gl£)'Ui.htl'U~Lv11'lJ£)"'i1'1.'iGi£)t{'U fgGl'i PIE = 'il~lt{'Uif';j'::j1T'U * EPS(Earning Per Share) *'ilmt{'U ru. 1'UvI I EPS = fil'1.'i~V1fi I -;:jl'U1'Ut{'U~1,r'1:! 10 jj.£..I.Lv11nlJ 4.28lJ1V1 c:i1'U EPS= 0.67 lJ1V1/t{'U PIE = 4.28 I 0.67 = 6.38 tvh PIE L'Unl'iLm£..llJLVI£..IlJlJ~~V1Gil\l" vlL'il~'Uh'1.~'U~~~lJ L'l1'ULm£..llJL VI£..IlJt{'UvI'il~'Uh L \ P E ratio lJDnDtl'it'i11Gl1.J1\1 L 'il';j~'1.~ L'UtlGl 1\1 n'i'ilJ LGl n'Ui1Gl1'1. ~ £..11 \1'UfJ n\1'1£) L nil £J\l'1.\l L 'W\l MVA: Market Value Added ...nl'i1~~~nl'il9ilLU'U\l1'U'lJ£)\l~lJ~\11'i Iif\lLLGiL~lJf1£)Gf\llJ~~V1 ...
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...Anreizsysteme in Unternehmen – Eine empirische Untersuchung des DAX 30 Seminararbeit an der Fakultät Wirtschaftswissenschaften der Bayerischen Julius-Maximilians-Universität Würzburg eingereicht bei Prof. Dr. Andrea Szczesny Lehrstuhl für Betriebswirtschaftslehre, insb. Controlling und Interne Unternehmensrechnung Eingereicht von: Binder, Konstanze Master Business Management, 2. Fachsemester Semmelstraße 23, 97070 Würzburg 23. Mai 2014 Erklärung Hiermit erkläre ich, dass ich die Arbeit selbstständig verfasst, keine anderen als die angegebenen Quellen und Hilfsmittel benutzt und die diese Quellen und Hilfsmitteln wörtlich oder sinngemäß entnommenen Ausführungen als solche kenntlich gemacht habe. Die Arbeit wurde keiner anderen Prüfungsbehörde vorgelegt. Würzburg, den 23.05.2014 Konstanze Binder Inhaltsverzeichnis Abbildungsverzeichnis ................................................................................................... II Tabellenverzeichnis ........................................................................................................ II Abkürzungsverzeichnis .................................................................................................. II 1 2 Einleitung .................................................................................................................. 1 Theoretische Grundlagen von Anreizsystemen ..................................................... 2 2.1 2.2 2.3 2.4 2.5 3 Definition .............
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...Verizon Communications Inc. NYSE: VZ Student Investment Fund Stock Report Analysts: Xi Cheng, Tanner McAndrew, Luke Thompson, and Daniel Wadsworth Recommendation: Buy Market Cap: $86.2 B Recent Price: $32.69(12/1/2009) Target Price: $47.11 Industry: Telecom Services Sector: Technology HIGHLIGHTS VZs subsidiary (Verizon Wireless) is the world’s largest wireless service provide VZ is expanding its presence in wireline services through an advance fiber optics network service called FiOS VZ has experienced growth in revenue over the past five years and is on pace for an 11% increase in 2009 VZ has a consistently increased its dividend payout There is large potential growth and development in the Telecom Industry VZ has competitive advantages in distribution network and pipelines Early Adoption of 4G Network Ranked as top 1 wireless service provider in annual consumer report INVESTMENT THESIS Demand for and dependence upon wireless technology has exhibited a strong upward trend which is expected to continue in the future. Verizon is competitively positioned to take advantage of this trend. Broadband service and the popularity of bundled services have increased substantially. With Verizon’s recent investment in this sector, the firm is expected to capture an increasing portion of demand. VZ’s ability to successfully generate a strong ROIC, add economic value, and further improve their dividend payout coming out of a deep recession demonstrates the...
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...Chapter3 Financial statements, Cash Flow, and Taxes 3-1 Financial statements and Reports 1. The annual report is the most important report that corporations issue to stockholders, and it contains two types of information. (1) First, there is a verbal section, often presented as a letter from the chairperson, which describes the firm’s operating results during the past year and discusses new developments that will affect future operations. (2) Second, the report provides these four basic financial statements: i. The balance sheet, which shows what assets the company owns and who has claims on those assets as of a given date. ii. The income statement, which shows the firm’s sales and costs (and thus profits) during some past period. iii. The statement of cash flows, which shows how much cash the firm began the year with, how much cash it ended up with, and what it did to increase or decrease its cash. iv. The statement of stockholders’ equity, which shows the amount of equity the stockholders had at the start of the year, the items that increased or decreased equity, and the equity at the end of the year. 2. In any event, the information contained in the annual report can be used to help forecast future earnings and dividends; therefore, investors are very interested in this report. 3-2 The Balance Sheet 1. The balance sheet is a “snapshot” of a firm’s position at a specific point in time. * * Stockholders’ equity can be thought of...
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...Chapter 3, 13th edtion Financial Statements, Cash Flow, and Taxes Learning Objectives After reading this chapter, students should be able to: ◆ List each of the key financial statements and identify the kinds of information they provide to corporate managers and investors. ◆ Estimate a firm’s free cash flow and explain why free cash flow has such an important effect on firm value. ◆ Discuss the major features of the federal income tax system. Lecture Suggestions The goal of financial management is to take actions that will maximize the value of a firm’s stock. These actions will show up, eventually, in the financial statements, so a general understanding of financial statements is critically important. Note that Chapter 3 provides a bridge between accounting, which students have just covered, and financial management. Unfortunately, many non-accounting students did not learn as much as they should have in their accounting courses, so we find it necessary to spend more time on financial statements than we would like. Also, at Florida and many other schools, students vary greatly in their knowledge of accounting, with accounting majors being well-grounded because they have had more intense introductory courses and, more importantly, because they are taking advanced financial accounting concurrently with finance. This gives the accountants a major, and somewhat unfair, advantage over the others in dealing with Chapters 3 and 4...
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...Total Information Management Corporation INTERNAL ANALYSIS Project in BUSSFIN I. COMPANY PROFILE A. Brief History Established in 1985, TIM started as a supplier of re-certified and re-furbished mainframes and peripherals equipment. Since then, TIM has expanded its product line to include the world's leading brands in hardware and software. TIM's services portfolio now comprise of maintenance and engineering services, business continuity and recovery solutions, system integration and outsourcing services. 25 years after its founding, TIM has evolved to be the provider of complete technology solutions to organizations in the fields of banking and finance, utilities, telecommunications and government. B. Board of Directors and Top Management BOARD OF DIRECTORS Mr. Joses Mari M. Antunez | Chairman | Mr. Robert A. Layson | Vice Chairman | Mr. Salvador P. Aque | Director | Mr. Jaime R. Camacho | Director | Ms. Verna O. Cruz | Director | Mr. Jon Mikel C. Antunez | Director | Mr. Julian Marco C. Antunez | Director | PRINCIPAL OFFICERS Mr. Salvador P. Aque | President | Ms. Verna O. Cruz | Senior Vice President - Finance & Admin | Ms.Maribeth S. Salceda | Vice President - Public Sector Business Unit | Mr. Kar Wai Wong | Assistant Vice President - Financial Services Business Unit | Mr. Jon Mikel C. Antunez | Assistant Vice President - Finance | C. Organizational Chart D. Company Vision – Mission Vision To be the...
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...The Walt Disney Company MBA 648 Company Research Project Megan Burke, Candace Longo, Irini Pertesis Table of Contents Executive Summary3 Products and Services4 Financial Planning and Analysis6 Operating Performance of the Firm6 Financial Statement Analysis 7 Financial Forecasting………..………………………………………….…………………...11 Sustainable Growth Rate………...………………………………………………………....13 Additional Funds Needed…………………………………………………………………...13 Cost of Capital……………………………………………………………………………….14 WACC………………………………………………………………………………………..14 Dividends and Stock Policies………………………………………………………………….15 Objectives of Business Corporations 16 Working Capital Management: 19 Cash and Marketable Securities Management: 21 Accounts Receivable Management…………………………………………………………….26 Financing Activities…………………………………………………………………………...26 Overall Analysis………..……………………………………………………………………….27 Executive Summary “I knew if this business was ever to get anywhere, if this business was ever to grow, it could never do it by having to answer to someone unsympathetic to its possibilities, by having to answer to someone with only one thought or interest, namely profits. For my idea of how to make profits has differed greatly from those who generally control businesses such as ours. I have blind faith in the policy that quality, tempered with good judgment and showmanship, will win against all odds.”—Walt Disney...
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...Final Paper July 6th, 2010 Liliana Azuara Patricio Elizondo Akim González 457179 588726 371282 Index Executive Summary Brief Outlook of CISCO Corporate Governance General Economic Analysis Industry Analysis Competitive Analysis Financial Analysis Value Creation Analysis Recommendations References Appendix – Appendix 1: Balance Sheet – Appendix 2: Income Statement – Appendix 3: Cash Flow Statement – Appendix 4: Liquidity – Appendix 5: Profitability – Appendix 6: Leverage – Appendix 7: Efficiency – Appendix 8: Growth Sustaintability – Appendix 9: BETA – Appendix 10: Market Value – Appendix 11: Value Creation – Appendix 12: Statistics – Appendix 13: Competition 2 3 4 5 6 7 8 14 15 16 16 17 18 19 20 21 22 23 23 26 27 28 29 2 Executive Summary Cisco Systems, Inc. is the worldwide leader in networking for the Internet. CAGR 2005-2009 for sales has growth at 10%. CAGR 2005-2008 for income has growth at 9%. Cisco has a strong liquidity position, current ratio on 3.24 for 2009. It has been growing through successful acquisitions that creates value for the company. Its WACC has been decreasing in this last 5 years 4.39% for 2009. Its gross margin has maintained above 60% over the last 5 years. Operating margin CAGR is one of the highest for the last 5 years: Cisco 24%, HP 7.6%, Juniper 6.07%, Industry 10%. Growth rate of EPS over a 5 year period for Cisco is 8.27 vs 7.2 of the sector and -1.46 for Juniper. Cisco has a sustainable...
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...Licensed to: iChapters User Eugene F. Brigham UNIVERSITY OF FLORIDA Joel F. Houston UNIVERSITY OF FLORIDA Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Eugene F. Brigham UNIVERSITY OF FLORIDA Joel F. Houston UNIVERSITY OF FLORIDA Copyright 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Licensed to: iChapters User This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time...
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...share Capital expenditures Capital Asset Pricing Model Cash conversion cycle CF Cash flow; CFt is the cash flow in Period t CR Conversion ratio CV Coefficient of variation Dp Dividend of preferred stock Dt Dividend in Period t DCF Discounted cash flow D/E Debt-to-equity ratio DEP Depreciation D1/P0 DPS DRIP Expected dividend yield Dividends per share Dividend reinvestment plan DRP Default risk premium DSO Days sales outstanding e Approximately equal to 2.7183 EAA Equivalent annual annuity EAR Effective annual rate, EFF% EBIT EBITDA EPS EVA F Earnings before interest and taxes; operating income Earnings before interest, taxes, depreciation, and amortization Earnings per share Economic value added (1) Fixed operating costs (2) Flotation cost FCF Free cash flow FVN Future value for Year N FVAN g GAAP HVN I IFRS IPER I/YR INT IP IPO IRR LIBOR ln(P/X) Future value of an annuity for N years Growth rate in earnings, dividends, and stock prices U.S. Generally Accepted Accounting Standards Firm’s horizon value at t ¼ N Interest rate; also referred to as r International Financial Reporting Standards Periodic interest rate Interest rate key on some calculators Interest payment in dollars Inflation premium Initial public...
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