DOC PREVIEW
BU FIN 311 - Financial Statements
Type Lecture Note
Pages 2

This preview shows page 1 out of 2 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

FIN 311 1st Edition Lecture 3 Outline of Last Lecture I. Balance Sheeta. Assetsb. Goodwill on the Balance Sheetc. Liabilitiesd. Owners’ EquityOutline of Current Lecture I. Income StatementII. Statement of Retained Earnings/Statement of Shareholder’s EquityIII. Statement of Cash Flowsi. Cash flow from operating activitiesii. Cash flow from investing activities:iii. Cash flow from financing activities:IV. Statement of Comprehensive IncomeV. TaxesCurrent LectureI. Income Statement:- Recorded overa period of time- General: Sales -Costs -Depreciation The more you use a fixed asset, its value decreases overtime EBIT Earnings Before Interest and Taxes -Int Interest Expenses EBT Earnings Before Taxes -T Taxes NT Net Income Either Paid out as dividends Additions to retained earnings to shareholders II. Statement of Retained Earnings/Statement of Shareholder’s Equity- Provides detail as to why total shareholders’ equity on the Balance Sheet has changed- Net Income = Dividends paid + Additions to retained earning- Retention Ratio = Additions to retained earningsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Net Income- When dividends are equal to zero, Retention Ratio is 100%III. Statement of Cash Flows- Explains why cash on the Balance Sheet has changedi. Cash flow from operating activities: Day-to-day running the business. Working capital decisions.ii. Cash flow from investing activities: Long term equipments (assets). Capital budgeting decisions.iii. Cash flow from financing activities: Raising capital to finance investments. Capital structure decisions.- Example: PepsiCash flow from operating activities 9,688Cash flow from investing activities -2,625Cash flow from financing activities -3,789Exchange rate changes - 196Net change in cash 3,078Beg Cash 6,297Change in Cash +3,078End Cash 9,375IV. Statement of Comprehensive Income:Net Income+ Unrelated gains and losses Comprehensive Income- Business report more expenses because the more expenses, the less they pay in taxes.V. Taxes:- Average Tax Rate = Total taxes paid Taxable income (EBT)- Marginal Tax Rate is the tax rate paid o the next dollar of taxable income.- Example: Taxable income = $14.5mi. Taxes paid = 50,000 (.15)25,000 (.25) 25,000 (.34) Always = 3,400,000235,000 (.39) 9,665,000 (.34) (14,500,000 – 10,000,000) (.35)Taxes paid = $4,975,000 ii. Taxed paid = 3,400,000 + [14,500,000 -10,000,000](.35) =4,975,000 Average Tax Rate = 4,975,000 = .343 or 34.3%


View Full Document

BU FIN 311 - Financial Statements

Type: Lecture Note
Pages: 2
Download Financial Statements
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Financial Statements and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Financial Statements 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?