Financial management and analysis phần 2 docx

Current Assets for Wal-Mart Stores, Procter & Gamble, and Walt Disney Company 2001Source: s Wal-Mart Stores Procter & Gamble Walt Disney Company Current Asset in Millions % of Total in M

.

Profits and Losses on the Exercise of a Call Option to Buy the Stock at

$60 The investor Pays $2 for this Call Option.

Profits and Losses on the Writing of a Call Option that Allows the Call Option Buyer to Buy the Stock at $60 The Call Writer Receives $2 for this Option.

Profits and Losses on the Exercise of a Put Option to Sell the Stock at

$60 The Investor Pays $2 for this Put Option.

Profits and Losses on the Writing of a Put Option that Allows the Put Option Buyer to Sell the Stock at $60 The Put Writer Receives $2 for this Option.

× −

× −

■ ■

■

■ ■

■ ■ ■

■

■ ■ ■ ■

■

■ ■

■

■

Federal Income Tax Rate Schedule for Corporations, 2001

If taxable income is:

over … but not over … tax is … of the amount over …

marginal

Marginal and Average Tax Rates from the 2001 Corporate Tax Rate Schedule

:

■

issues

paid

b b

Modified Accelerated Cost Recovery System (MACRS)

Panel a Classified Lives

Panel b Depreciation Rates for 3-Year, 5-Year, 7-Year, 10-Year, 15-Year, and 20-Year Classified Assets

Depreciation Rate (%) Year 3-Year 5-Year 7-Year 10-Year 15-Year 20-Year

MACRS Depreciation of a $50,000 Truck, Using MACRS Rates

a

b

Year Depreciation Rate Depreciation Expense = Rate Times $50,000

a b

−

Year Taxable Income Taxes Paid

Year

Taxable

Income

Amount of Loss Applied

Refigured Taxable Income

Refigured Taxes Refund

KPMG International’s Corporate Tax Rate Survey, January 2002

Corporate Tax Rate Survey

Year Taxable Income Taxes Paid (30% of Taxable Income)

Year Taxable Income Taxes Paid (40% of Taxable Income)

125

■ Transactions are recorded at historical cost

■ The appropriate unit of measurement is the dollar

■ The statements are recorded for predefined periods of time

■ Statements are prepared using accrual accounting and the matching principle

■ It is assumed that the business will continue as a going concern

■ Full disclosure requires providing information beyond the financial statements

■ Statements are prepared assuming conservatism

Fictitious Corporation Balance Sheets for Years Ending December 31,

■

■

■

Current Assets for Wal-Mart Stores, Procter & Gamble, and Walt Disney Company (2001)

Source:

s

Wal-Mart Stores

Procter &

Gamble

Walt Disney Company Current

Asset

in Millions

% of Total

in Millions

% of Total

in Millions

% of Total

■

■

■

■

Current Liabilities for Wal-Mart Stores, Procter & Gamble, and the Walt Disney Company

Source:

Wal-Mart Stores

Procter &

Gamble

Walt Disney Company Current

Liability

in Millions

% of Total

in Millions

% of Total

in Millions

% of Total

Fictitious Corporation Income Statements for Years Ending December 31 (in Thousands)

■ ■ ■ ■ ■

Fictitious Company Statement of Cash Flows, Years Ended December

31, in Thousands

2003 2002

Adjustment of Net Income for Changes in Working Capital Accounts

to Arrive at Cash Flow from Operations

tract

sub-added

Change in Working Capital Account Adjustment to Net Income

less less

Pretend Corporation Statement of Cash Flows

Cash Flows from (Used for) Operating, Investment, and Financing Activities (In millions)

Source:

Cash flow from operations

Cash flow from investing activities

Cash flow from financing activities

Company

Cash Flows from (for) Operating Activities

Cash Flows from (for) Investment Activities

Cash Flows from (for) Financing Activities

Increase (Decrease)

in Cash and Cash Equivalents

Fictitious Corporation Statement of Shareholders’ Equity

Shares

Common Stock

Retained Earnings Total

■ ■

■ ■ ■ ■ ■

■ ■ ■ ■

■ ■ ■ ■ ■ ■ ■ ■

principal

interest

present value

N basic valuation equation

growth rate

The Value of $1,000 Invested 10 Years in an Account that Pays 10% Compounded Interest per Year

return

not

−

arithmetic average return

geometric average return

compound average annual return true return

PV

FV

annual percentage rate

per compounding period

i

×

FV

i N

Value of $50,000 Invested in the Account that Pays 8% Interest Per Year: Quarterly versus Annual Compounding

Compounding

Frequency Period

Rate per Compounding Period,

Number of Periods in

5 Years,

at the End of Five Years

PV FV

-Present Value of $5,000 Discounted at 10%

Hewlett-Packard

10B

Hewlett-Packard 12C

Hewlett-Packard 17B

Texas Instruments BA-II Plus

CF

Time when Deposit is Made Amount of Deposit

Period Cash Flow End of Period Cash Flow

Compounding Factor

Future Value

Present Value

∑

Hewlett-Packard 17B

Texas Instruments BA-II Plus

Balance in an Account in which Deposits of $2,000 Each are Made Each Year The Balance in the Account Earns 8%.

N

∑

∑

Compounding Factor

Future Value

i

i

Discounting Factor

Present Value

Reduction in Loan Balance (Payment− Interest)

End of Period Loan Balance

∑

Hewlett-Packard 17B

Texas Instruments BA-II Plus

PV CF

Number of Discounting Periods, Present Value Annuity Factor

annuity due

one more period

∑

∑

-Balance in the Account that Requires a Deposit Today (Year 0) that Permits Withdrawals of $5,000 Each Starting at the End of Year 5

■

■

■

- PV ( i )n

PV

Number of Periods Interest Rate per Period Compound Factor

Number of Periods Interest Rate Per Period Discount Factor

Number of Payments Interest Rate Per Period Future Value Annuity Factor

Number of Payments Interest Rate Per Period Present Value Annuity Factor

Period End of Period Cash Flow

Year End of Year Cash Flow

Period End of Period Cash Flow

Year End of Year Cash Flow