Corporate Finance 3

Current Assets

Cash and equivalents, accounts receivable, and inventory

Long Term (Fixed) Assets

Net plant and equipment, other long term assets

Total Assets

Current Assets + Long Term Assets

Current Liabilities

Accrued wages and taxes, accounts payable, notes payable

Stockholders equity

Common stock + Retained earnings= Total Assets- liabilities

Total Liabilities and equity

Current liabilities + Long-term debt + Total common equity

Net Working Capital

current assets - current liabilities

EBIT ( Operating Income)

Revenues - Costs - Depreciation

EBITDA

Earnings before interest, taxes, depreciation, and amortization

Cash Flow Statement

How much cash is generated

Sources of Cash

Net Income, Depreciation/Amortization, Noncash Current Assets that decrease, Fixed assets that decrease, Current Liabilities that increase, long term debt that increases, sale of stock

Uses of Cash

Losses in Net Income, Noncash current assets that increase, fixed assets that increase, current liabilities that decrease, long term debt that decreases, stock that is repurchased and dividends paid

Dividend Payout Ratio

Dividends Paid/ Net Income

PlowBack Raito

1- Dividend Payout Ratio

Ending Stock Holder equity

Beginning stockholder equity + net income -dividends paid

Nopat

EBIT x (1-tax rate)

FCF

NOPAT + Depreciation and Amortization - ( Capex + change in net working capital)

Market Value Added

The difference between book value and market value