武汉理工大学：《财务管理》课程PPT教学课件（英文版）Chapter 7 Fund Analysis, Cash- Flow Analysis, and Financial Planning

Chapter 7 Fund Analysis. cash Flow Analysis, and Financial Planning 7-1

7-1 Chapter 7 Fund Analysis, Cash￾Flow Analysis, and Financial Planning

Fund Analysis, Cash-Flow Analysis, and Financial Planning n Flow of Funds(Sources and Uses Statement o Accounting Statement of Cash-Flows n Cash-Flow Forecasting o Range of Cash-Flow Estimates n Forecasting Financial Statements 7-2

7-2 Fund Analysis, Cash-Flow Analysis, and Financial Planning Flow of Funds (Sources and Uses) Statement Accounting Statement of Cash-Flows Cash-Flow Forecasting Range of Cash-Flow Estimates Forecasting Financial Statements

Flow of Funds statement A summary of a firm's changes in financial position from one period to another: it is also called a sources and uses of funds statement or a statement of changes in financial position Has been replaced by the cash flow statement(1989 ) in U.S. audited annual reports. 7-3

7-3 Flow of Funds Statement Has been replaced by the cash flow statement (1989) in U.S. audited annual reports. A summary of a firm’s changes in financial position from one period to another; it is also called a sources and uses of funds statement or a statement of changes in financial position

Why Examine the Flow of Funds statement QUESTION? Why should we bother to understand a flow of funds Statement that is no longer required to appear in U.s. audited annual reports? 7-4

7-4 Why Examine the Flow of Funds Statement QUESTION? Why should we bother to understand a Flow of Funds Statement that is no longer required to appear in U.S. audited annual reports?

Why Examine the Flow of Funds statement The flow of Funds statement n Includes important noncash transactions while the cash flow statement does not n Is easy to prepare and often preferred by managers for analysis purposes over the more complex cash flow statement n Helps you to better understand the cash flow statement, especially if it is prepared under the Indirect method 7-5

7-5 Why Examine the Flow of Funds Statement Includes important noncash transactions while the cash flow statement does not. Is easy to prepare and often preferred by managers for analysis purposes over the more complex cash flow statement Helps you to better understand the cash flow statement, especially if it is prepared under the Indirect method. The Flow of Funds Statement:

Flow of Funds statement What are funds? all of the firm's investments and claims against those investments Extends beyond just transactions involving cash. 7-6

7-6 Flow of Funds Statement All of the firm‘s investments and claims against those investments. Extends beyond just transactions involving cash. What are funds?

Sources and Uses Statement The letters labeling the box stand for Uses, Sources A Assets, and Liabilities(broadly defined). The pluses (minuses)indicate Increases (decreases)in assets or liabilities

7-7 Sources and Uses Statement The letters labeling the box stand for Uses, Sources, Assets, and Liabilities (broadly defined). The pluses (minuses) indicate increases (decreases) in assets or liabilities. A L - + + - S U

BWs Determination of Sources and uses Assets 19X3 19X2+-s/U Cash and C,E 90$100 Acct rec 394 410 Inventories 696 616 ssU Prepaid Exp 50 5 Accum Tax Prepay Current Assets s 1, 195s 1,140 NA Fixed Assets(@Cost) 1030 930 NA ess: ACC. Depr. 329 (299) NA Net Fix Assets 701$ 631 Investment. LT 50 50 Other Assets. LT 223 223 78 Total Assets S 2,169$ 2,044

7-8 BWs’ Determination of Sources and Uses $ 100 - S 410 - S 616 + U 5 -- 9 + U $ 1,140 N/A 930 N/A (299) N/A $ 631 + U 50 -- 223 -- $ 2,044 Cash and C.E. $ 90 Acct. Rec. 394 Inventories 696 Prepaid Exp 5 Accum Tax Prepay 10 Current Assets $ 1,195 Fixed Assets (@Cost) 1030 Less: Acc. Depr. (329) Net Fix. Assets $ 701 Investment, LT 50 Other Assets, LT 223 Total Assets $ 2,169 Assets 19X3 19X2 +/- S/U

BWs Determination of Sources and uses Assets 19X3 19X2+-s/U Cash and C,E $90|$100$10S Acct rec 394 41016s Inventories 696 61680U Prepaid Exp Accum Tax Prepay 50 5 1 U Current Assets s 1, 195s 1,140 NA Fixed Assets(@Cost) 1030 930 NA ess: ACC. Depr. 329 (299) NA Net Fix Assets s 701$ 63170U Investment. LT 50 50 Other Assets. LT 223 223 79 Total Assets S 2,169$ 2,044

7-9 BWs’ Determination of Sources and Uses $ 100 $10 S 410 16 S 616 80 U 5 -- 9 1 U $ 1,140 N/A 930 N/A (299) N/A $ 631 70 U 50 -- 223 -- $ 2,044 Cash and C.E. $ 90 Acct. Rec. 394 Inventories 696 Prepaid Exp 5 Accum Tax Prepay 10 Current Assets $ 1,195 Fixed Assets (@Cost) 1030 Less: Acc. Depr. (329) Net Fix. Assets $ 701 Investment, LT 50 Other Assets, LT 223 Total Assets $ 2,169 Assets 19X3 19X2 +/- S/U

BWs Determination of Sources and uses Liabilities and Equity 19X3 19X2+-S/U Notes Payable $290$295 U Acct Payable 94 94 Accrued Taxes 16 16 Other accrued liab 100 100 Current Liab. S 500 S 505 NA Long-Term Debt 530 453+s Shareholders?Equity Com. Stock($1 par) 200 200 Add pd in Capital 729 729 Retained earnings 210 157 s Total Equity 5 1,139 s1086 NA 710 Total Liab/Equity s 2,169$ 2,044

7-10 BWs’ Determination of Sources and Uses $ 295 - U 94 -- 16 -- 100 -- $ 505 N/A 453 + S 200 -- 729 -- 157 + S $ 1086 N/A $ 2,044 Notes Payable $ 290 Acct. Payable 94 Accrued Taxes 16 Other Accrued Liab. 100 Current Liab. $ 500 Long-Term Debt 530 Shareholders?Equity Com. Stock ($1 par) 200 Add Pd in Capital 729 Retained Earnings 210 Total Equity $ 1,139 Total Liab/Equity $ 2,169 Liabilities and Equity 19X3 19X2 +/- S/U