大学课件：公司金融学ch09.ppt

1、9-1nBalance sheetnIncome statementnStatement of cash flowsnAccounting income versus cash flownMVA and EVAnPersonal taxesnCorporate taxesCHAPTER 9Financial Statements,Cash Flow,and Taxes9-2Income Statement20012002Sales3,432,000 5,834,400 COGS2,864,000 4,980,000 Other expenses340,000 720,000 Deprec.18

2、,900 116,960 Tot.op.costs 3,222,900 5,816,960 EBIT209,100 17,440 Int.expense62,500 176,000 EBT146,600(158,560)Taxes(40%)58,640(63,424)Net income87,960(95,136)9-3What happened to sales and net income?nSales increased by over$2.4 million.nCosts shot up by more than sales.nNet income was negative.nHowe

3、ver,the firm received a tax refund since it paid taxes of more than$63,424 during the past two years.9-4Balance Sheet:Assets20012002Cash9,000 7,282 S-T invest.48,600 20,000 AR351,200 632,160 Inventories715,200 1,287,360 Total CA1,124,000 1,946,802 Gross FA491,000 1,202,950 Less:Depr.146,200 263,160

4、Net FA344,800 939,790 Total assets1,468,800 2,886,592 9-5What effect did the expansion have on the asset section of the balance sheet?nNet fixed assets almost tripled in size.nAR and inventory almost doubled.nCash and short-term investments fell.9-6Statement of Retained Earnings:2002Balance of ret.e

5、arnings,12/31/2001203,768 Add:Net income,2002(95,136)Less:Dividends paid,2002(11,000)Balance of ret.earnings,12/31/200297,632 9-7Balance Sheet:Liabilities&Equity20012002Accts.payable145,600 324,000 Notes payable200,000 720,000 Accruals136,000 284,960 Total CL481,600 1,328,960 Long-term debt323,432 1

6、,000,000 Common stock460,000 460,000 Ret.earnings203,768 97,632 Total equity663,768 557,632 Total L&E1,468,800 2,886,592 9-8What effect did the expansion have on liabilities&equity?nCL increased as creditors and suppliers“financed”part of the expansion.nLong-term debt increased to help finance the e

7、xpansion.nThe company didnt issue any stock.nRetained earnings fell,due to the years negative net income and dividend payment.9-9Statement of Cash Flows:2002Operating ActivitiesNet Income(95,136)Adjustments:Depreciation116,960 Change in AR(280,960)Change in inventories(572,160)Change in AP178,400 Ch

8、ange in accruals148,960 Net cash provided by ops.(503,936)9-10Long-Term Investing Activities Cash used to acquire FA(711,950)Financing Activities Change in S-T invest.28,600 Change in notes payable520,000 Change in long-term debt676,568 Payment of cash dividends(11,000)Net cash provided by fin.act.1

9、,214,1689-11Summary of Statement of CFNet cash provided by ops.(503,936)Net cash to acquire FA(711,950)Net cash provided by fin.act.1,214,168 Net change in cash(1,718)Cash at beginning of year9,000Cash at end of year7,2829-12What can you conclude from the statement of cash flows?nNet CF from operati

10、ons=-$503,936,because of negative net income and increases in working capital.nThe firm spent$711,950 on FA.nThe firm borrowed heavily and sold some short-term investments to meet its cash requirements.nEven after borrowing,the cash account fell by$1,718.9-13What is free cash flow(FCF)?Why is it imp

11、ortant?nFCF is the amount of cash available from operations for distribution to all investors(including stockholders and debtholders)after making the necessary investments to support operations.nA companys value depends upon the amount of FCF it can generate.9-14What are the five uses of FCF?1.Pay i

12、nterest on debt.2.Pay back principal on debt.3.Pay dividends.4.Buy back stock.5.Buy nonoperating assets(e.g.,marketable securities,investments in other companies,etc.)9-15What are operating current assets?nOperating current assets are the CA needed to support operations.lOp CA include:cash,inventory

13、,receivables.lOp CA exclude:short-term investments,because these are not a part of operations.9-16What are operating current liabilities?nOperating current liabilities are the CL resulting as a normal part of operations.lOp CL include:accounts payable and accruals.lOp CA exclude:notes payable,becaus

14、e this is a source of financing,not a part of operations.9-17What effect did the expansion have on net operating working capital(NOWC)?NOWC02=($7,282+$632,160+$1,287,360)-($324,000+$284,960)=$1,317,842.NOWC01=$793,800.=-Operating CAOperating CLNOWC9-18What effect did the expansion have on total oper

15、ating capital?=NOWC+Net fixed assets.=$1,317,842+$939,790=$2,257,632.=$1,138,600.Operatingcapital02Operatingcapital01Operatingcapital9-19Did the expansion create additional net operating profit after taxes(NOPAT)?NOPAT=EBIT(1-Tax rate)NOPAT02=$17,440(1-0.4)=$10,464.NOPAT01=$125,460.9-20What was the

16、free cash flow(FCF)for 2002?FCF=NOPAT-Net investment in capital =$10,464-($2,257,632-$1,138,600)=$10,464-$1,119,032 =-$1,108,568.How do you suppose investors reacted?9-21Return on Invested Capital(ROIC)ROIC=NOPAT/Total operating capitalROIC02=$10,464/$2,257,632=0.5%.ROIC01=11.0%.9-22The firms cost o

17、f capital is 10%.Did the growth add value?nNo.The ROIC of 0.5%is less than the WACC of 10%.Investors did not get the return they require.nNote:High growth usually causes negative FCF(due to investment in capital),but thats ok if ROIC WACC.For example,Home Depot has high growth,negative FCF,but a hig

18、h ROIC.9-23Calculate EVA.Assume the cost of capital(WACC)was 10%for both years.EVA=NOPAT-(WACC)(Capital)EVA02=$10,464-(0.1)($2,257,632)=$10,464-$225,763=-$215,299.EVA01=$125,460-(0.10)($1,138,600)=$125,460-$113,860=$11,600.9-24Stock Price and Other Data20012002Stock price$8.50$2.25#of shares100,000

19、100,000EPS$0.88-$0.95DPS$0.22$0.119-25What is MVA(Market Value Added)?nMVA=Market Value of the Firm-Book Value of the FirmnMarket Value=(#shares of stock)(price per share)+Value of debtnBook Value=Total common equity+Value of debt(More)9-26MVA(Continued)nIf the market value of debt is close to the b

20、ook value of debt,then MVA is:MVA=Market value of equity book value of equity9-27Find 2002 MVA.(Assume market value of debt=book value of debt.)nMarket Value of Equity 2002:l(100,000)($6.00)=$600,000.nBook Value of Equity 2002:l$557,632.MVA02=$600,000-$557,632=$42,368.MVA01=$850,000-$663,768=$186,23

21、2.9-28Key Features of the Tax CodenCorporate TaxesnIndividual Taxes9-292001 Corporate Tax RatesTaxable IncomeTax on BaseRate*0-50,000015%50,000-75,0007,50025%75,000-100,00013,75034%100,000-335,00022,25039%Over 18.3M6.4M35%*Plus this percentage on the amount over the bracket base.9-30Features of Corp

22、orate TaxationnProgressive rate up until$18.3 million taxable income.lBelow$18.3 million,the marginal rate is not equal to the average rate.lAbove$18.3 million,the marginal rate and the average rate are 35%.9-31Features of Corporate Taxes(Cont.)nA corporation can:ldeduct its interest expenses but no

23、t its dividend payments;lcarry-back losses for two years,carry-forward losses for 20 years.lexclude 70%of dividend income if it owns less than 20%of the companys stock9-32Assume a corporation has$100,000 of taxable income from operations,$5,000 of interest income,and$10,000 of dividend income.What i

24、s its tax liability?9-33Operating income$100,000Interest income5,000Taxable dividendincome3,000*Taxable income$108,000Tax=$22,250+0.39($8,000)=$25,370.*Dividends-Exclusion =$10,000-0.7($10,000)=$3,000.9-34Key Features of Individual TaxationnIndividuals face progressive tax rates,from 15%to 39.1%.(Th

25、e Tax Relief Act of 2001 will reduce these rates.)nThe rate on long-term(i.e.,more than one year)capital gains is 20%.But capital gains are only taxed if you sell the asset.nInterest on municipal(i.e.,state and local government)bonds is not subject to Federal taxation.9-35Individual Rates for 2001Ta

26、xable Income Tax on Base Rate*0-27,050 0 15.0%27,050-65,550 4,057.5 27.5%65,550-136,750 14,645.0 30.5%136,750-297,350 36,361.0 35.5%297,350-93,374.0 39.1%*Plus this percentage on the amount over the bracket base.9-36Assume your salary is$45,000,and you received$3,000 in dividends.You are single,so y

27、our personal exemption is$2,900 and your itemized deductions are$7,100.On the basis of the information above and the 2001 tax year tax rate schedule,what is your tax liability?9-37Calculation of Taxable IncomeSalary$45,000Dividends3,000Personal exemptions(2,900)Deductions(7,100)Taxable Income$38,000

28、9-38nTax Liability:TL=$4,057.50+0.275($38,000-$27,050)=$7,068.75.nMarginal Tax Rate=27.5%.nAverage Tax Rate:Tax rate=$7,068.75/$38,000=18.6%.OrTax rate=$7,068.75/$48,000=14.7%.9-39State and local government bonds(municipals,or“munis”)are generally exempt from federal taxes.Taxable versus Tax Exempt

29、Bonds9-40nExxon bonds at 10%versus California muni bonds at 7%.nT=Tax rate=27.5%.nAfter-tax interest income:Exxon=0.10($5,000)-0.10($5,000)(0.275)=0.10($5,000)(0.72)=$362.5.CAL=0.07($5,000)-0=$350.9-41Solve for T in this equation:Muni yield=Corp Yield(1-T)7.00%=10.0%(1-T)T=30.0%.At what tax rate would you be indifferent between the muni and the corporate bonds?9-42nIf T 30%,buy tax exempt munis.nIf T 30%,buy corporate bonds.nOnly high income,and hence high tax bracket,individuals should buy munis.Implications