CHAPTER 7 Financial Statements and CF

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CHAPTER 7Financial Statements and CF

• Balance sheet
• Income statement
• Statement of cash flows
• Free Cash Flow
• Performance Analysis

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The Annual Report

• Balance sheet provides a snapshot of a firms
  financial position at one point in time.
• Income statement summarizes a firms revenues
  and expenses over a given period of time.
• Statement of cash flows reports the impact of a
  firms activities on cash flows over a given
  period of time.

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Financial Statements
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Balance Sheet Assets
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Balance sheet Liabilities and Equity
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Income statement
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Other data
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Statement of Retained Earnings
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Statement of Retained Earnings
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Statement of Cash Flows
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Statement of Cash Flows
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Statement of Cash Flows
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Statement of Cash Flows
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Statement of Cash Flows (2006)
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STEPS TO CALCULATE FREE (FINANCIAL) CASH FLOWS OF
A FIRM
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STEPS TO CALCULATE FREE (FINANCIAL) CASH FLOWS OF
A FIRM
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Analysis of Profitability

• Return on Invested Capital (ROIC)
• NOPAT / Total Operating Capital
• Economic Value Added (EVA)
• NOPAT (WACC Tot Oper. Capital)
• Market Value Added (MVA)
• Market Value of equity Book Value of equity

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Analysis of Profitability