1. The document discusses prospective financial analysis, which involves forecasting future financial statements to value securities, assess management plans, and evaluate solvency.
2. It provides steps for projecting an income statement and balance sheet, including forecasting revenue, expenses, assets, liabilities, and equity accounts based on historical trends and ratios.
3. The document includes a sample projected income statement and balance sheet for Target Corporation for 2006 using the outlined forecasting steps and 2005 actual financial statements.
This document discusses key points about leases, including the differences between capital and operating leases. Capital leases transfer substantially all risks and benefits of ownership to the lessee, who accounts for it as an asset and liability. Operating leases are treated as rental expenses. The document provides an example to illustrate how to determine the interest and principal portions of a capital lease payment and compares the income statement and balance sheet effects of operating versus capital leases. It also discusses lease disclosure requirements and off-balance sheet financing using operating leases.
The document discusses various topics related to analyzing investing activities including investment securities, business combinations, and derivative securities. It provides definitions and accounting treatments for different types of investment securities, the equity method of accounting for intercorporate investments, and the purchase method of accounting for business combinations. It also defines various types of derivative securities and discusses disclosure requirements related to derivatives and the fair value option for reporting financial assets and liabilities.
This document discusses liquidity and working capital analysis. It defines key terms like liquidity, current assets, current liabilities, and working capital. It then discusses various liquidity ratios used to analyze companies, including the current ratio, quick ratio, and cash ratio. It also discusses analyzing operating activities through accounts receivable and inventory turnover ratios. Additional liquidity measures like financial flexibility and cash flow analysis are covered. The document concludes by discussing analyzing a company's capital structure, earnings coverage, and overall solvency.
This document discusses accounting for pensions and postretirement benefits. It covers:
1) Defined benefit and defined contribution pension plans, and how a company determines annual costs for each.
2) How a company determines the annual cost of a defined benefit pension plan using a three step process involving actuaries to calculate future benefits, present value, and period to spread costs.
3) Factors that impact pension expenses such as changes in discount rates, expected returns on assets, compensation growth rates, additional benefits granted, and changes to life expectancies or employee turnover assumptions.
This document provides an overview of analyzing a company's financing activities. It discusses the major sources of corporate financing which include liabilities, capital/stockholders' equity, and off-balance sheet transactions. For liabilities, it describes the two major types and how they are classified. For capital/stockholders' equity, it outlines the basic elements including preferred stock, common stock, paid-in capital, retained earnings, and treasury stock. It also discusses off-balance sheet financing methods and the motivations for using them. Commitments and contingencies are distinguished, and lease accounting is briefly covered.
This document discusses cash flow analysis and the statement of cash flows. It covers key topics such as the relevance of cash flows, how to construct a statement of cash flows using both the direct and indirect methods, special topics related to cash flows, implications of cash flow analysis, and how to analyze cash flows. The statement of cash flows provides important information about a company's liquidity, solvency, and financial flexibility that is not available from its income statement alone.
This document provides an overview of various topics related to analyzing financial statements, including:
- Classification of assets as current/short-term versus noncurrent/long-term.
- Specific current assets like cash, accounts receivable, inventory, and prepaid expenses. Methods for valuing these assets are discussed.
- Long-lived or long-term assets including tangible assets like property, plant, and equipment as well as intangible assets. The capitalization, allocation, and impairment of these assets is covered.
- Specific sections cover topics like accounting for cash, analyzing receivables, inventory costing methods, plant asset costing and valuation, and depreciation of plant assets.
This document discusses key points about leases, including the differences between capital and operating leases. Capital leases transfer substantially all risks and benefits of ownership to the lessee, who accounts for it as an asset and liability. Operating leases are treated as rental expenses. The document provides an example to illustrate how to determine the interest and principal portions of a capital lease payment and compares the income statement and balance sheet effects of operating versus capital leases. It also discusses lease disclosure requirements and off-balance sheet financing using operating leases.
The document discusses various topics related to analyzing investing activities including investment securities, business combinations, and derivative securities. It provides definitions and accounting treatments for different types of investment securities, the equity method of accounting for intercorporate investments, and the purchase method of accounting for business combinations. It also defines various types of derivative securities and discusses disclosure requirements related to derivatives and the fair value option for reporting financial assets and liabilities.
This document discusses liquidity and working capital analysis. It defines key terms like liquidity, current assets, current liabilities, and working capital. It then discusses various liquidity ratios used to analyze companies, including the current ratio, quick ratio, and cash ratio. It also discusses analyzing operating activities through accounts receivable and inventory turnover ratios. Additional liquidity measures like financial flexibility and cash flow analysis are covered. The document concludes by discussing analyzing a company's capital structure, earnings coverage, and overall solvency.
This document discusses accounting for pensions and postretirement benefits. It covers:
1) Defined benefit and defined contribution pension plans, and how a company determines annual costs for each.
2) How a company determines the annual cost of a defined benefit pension plan using a three step process involving actuaries to calculate future benefits, present value, and period to spread costs.
3) Factors that impact pension expenses such as changes in discount rates, expected returns on assets, compensation growth rates, additional benefits granted, and changes to life expectancies or employee turnover assumptions.
This document provides an overview of analyzing a company's financing activities. It discusses the major sources of corporate financing which include liabilities, capital/stockholders' equity, and off-balance sheet transactions. For liabilities, it describes the two major types and how they are classified. For capital/stockholders' equity, it outlines the basic elements including preferred stock, common stock, paid-in capital, retained earnings, and treasury stock. It also discusses off-balance sheet financing methods and the motivations for using them. Commitments and contingencies are distinguished, and lease accounting is briefly covered.
This document discusses cash flow analysis and the statement of cash flows. It covers key topics such as the relevance of cash flows, how to construct a statement of cash flows using both the direct and indirect methods, special topics related to cash flows, implications of cash flow analysis, and how to analyze cash flows. The statement of cash flows provides important information about a company's liquidity, solvency, and financial flexibility that is not available from its income statement alone.
This document provides an overview of various topics related to analyzing financial statements, including:
- Classification of assets as current/short-term versus noncurrent/long-term.
- Specific current assets like cash, accounts receivable, inventory, and prepaid expenses. Methods for valuing these assets are discussed.
- Long-lived or long-term assets including tangible assets like property, plant, and equipment as well as intangible assets. The capitalization, allocation, and impairment of these assets is covered.
- Specific sections cover topics like accounting for cash, analyzing receivables, inventory costing methods, plant asset costing and valuation, and depreciation of plant assets.
This document discusses return on invested capital (ROIC) and profitability analysis. It defines ROIC as income divided by invested capital and identifies three key applications of ROIC: (1) measuring managerial effectiveness, (2) measuring profitability, and (3) as a measure for planning and control. The document outlines different measures of invested capital, including net operating assets and stockholders' equity. It also discusses how to calculate ROIC using these measures and the importance of making adjustments to invested capital and income numbers for effective analysis.
This document discusses analyzing earnings persistence, which is key to effective equity analysis and valuation. It describes two common methods for assessing earnings persistence: recasting and adjusting the income statement. Recasting rearranges earnings components to provide a meaningful classification, while adjusting aims to assign earnings components to the periods they best belong. The document also identifies factors that determine earnings persistence, such as earnings trends, variability, earnings management, and management incentives.
This document discusses concepts related to analyzing a company's operating activities through its financial statements. It covers topics such as economic versus permanent income, revenue and expense recognition criteria, non-recurring items, deferred charges, employee stock options, interest costs, and income taxes. The key concepts are that economic income includes both recurring and non-recurring components, while permanent income reflects a company's stable average earnings power. It also discusses adjusting the income statement and balance sheet for non-recurring items to better assess a company's core operating performance.
This document discusses the statement of cash flows and cash flow analysis. It begins by explaining the relevance of cash flows and the statement of cash flows. The statement of cash flows reports cash receipts and payments categorized by operating, investing, and financing activities. It can be constructed using either the direct or indirect method. The indirect method adjusts net income for non-cash items to determine cash flows from operations. Cash flow analysis helps assess a company's liquidity, solvency, and financial flexibility. Ratios like the cash flow adequacy ratio and cash reinvestment ratio can provide additional insights.
Financial Reporting And Analysis Explained.as to why is it important, Who is it important for and the different ways of analyzing a financial statement.
Greenwich University
This document discusses several financial analysis techniques including horizontal analysis, vertical analysis, common-size statements, price-earnings ratios, dividend payout ratios, and financial leverage. It provides examples of calculating key financial ratios such as gross margin percentage, earnings per share, price-earnings ratio, dividend payout ratio, return on assets, return on equity, book value per share, current ratio, and acid-test ratio. The document also discusses how to interpret trends in financial statement items over multiple years.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
The statement of cash flows shows how a company's operating, investing, and financing activities affected cash during an accounting period. It explains the net increase or decrease in cash. Cash includes cash equivalents such as money market accounts and treasury bills. The statement of cash flows classifies cash flows into operating, investing, and financing activities to provide information about cash receipts and payments. Adjustments must be made to the income statement to convert accrual-based figures to a cash basis for the operating activities section.
Financial statement analysis involves analyzing a company's financial statements to assess its performance and financial position. It is used to evaluate factors like profitability, solvency, liquidity, and efficiency. Key tools for financial statement analysis include financial ratios, common size analysis, trend analysis, and comparisons to industry standards and past performance. The purpose is to provide useful information to decision makers about a company's historical performance, current condition, and future prospects.
The document provides an overview of financial statement analysis. It discusses that financial analysis identifies the financial strengths and weaknesses of a firm by establishing relationships between balance sheet and profit/loss statement items. The key objectives of financial analysis are to evaluate a firm's profitability, debt servicing ability, business risk, and growth. Various techniques of financial analysis are also outlined, including comparative statements analysis, common-size analysis, trend analysis, and ratio analysis. The document aims to explain the concepts and applications of financial statement analysis.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
The document provides an overview of financial statements, including balance sheets, cash flow statements, and notes. It explains that a balance sheet summarizes a company's financial position at a point in time by listing assets, liabilities, and shareholder equity. It also describes the major components of each type of financial statement and provides sample notes to the financial statements that give additional context and details. The cash flow statement tracks cash inflows and outflows from operating, investing, and financing activities over a period of time. Understanding these statements is important for assessing a company's financial strength and cash flows.
This document summarizes key points from Chapter 11 on equity analysis and valuation. It discusses recasting financial statements to separate recurring from non-recurring earnings components. Earnings persistence, determinants of persistence, and their relevance for forecasting are analyzed. Earnings-based valuation is described, emphasizing the use of earnings and accounting measures to compute company value. The importance of analyzing earning power and forecasting earnings for valuation purposes is also explained. Several tools for equity analysis and techniques for recasting, adjusting, and forecasting earnings are outlined.
This document provides an analysis of financial statements including the balance sheet, trial balance, and differences between them. It discusses how a balance sheet is organized according to order of permanence or liquidity with assets on one side and liabilities/capital on the other. The trial balance contains debit and credit balances of all accounts to test accuracy, while the balance sheet incorporates only asset and liability balances to ascertain financial position on a given date. It also outlines the differences between a profit and loss account, which shows revenues/expenses over time, and a balance sheet, which presents assets, liabilities and capital at a point in time.
This document discusses the analysis of financial statements through various tools and techniques. It begins by defining financial statement analysis and outlining its purpose. It then explains key tools for analysis like comparative statements, common size statements, trend analysis, and ratio analysis. Various types of ratios are classified like liquidity, leverage, activity, and profitability ratios. The document also discusses the interpretation of analysis and interested parties that use financial statement analysis.
The document discusses key financial statements that provide information about a company's financial performance and position. It describes the income statement as showing revenues, expenses and profits over a period of time. The balance sheet provides a snapshot of assets, liabilities and shareholders' equity as of a point in time. The cash flow statement reports cash inflows and outflows during a period. Understanding these statements allows analysis of a company's current and future financial condition.
Finance for Non Financial Managers 6th Edition Bergeron Test BankSandraBentonss
fULL DOWNLOAD : https://alibabadownload.com/product/finance-for-non-financial-managers-6th-edition-bergeron-test-bank/ Finance for Non Financial Managers 6th Edition Bergeron Test Bank , Finance for Non Financial Managers,Bergeron,6th Edition,Test Bank
The document defines key accounting terms like assets, liabilities, equity, accounts receivable, accounts payable, accrued liabilities, and provides explanations of accounting concepts like the accounting equation, accrual basis accounting, and balance sheet. It also summarizes key financial statements including the income statement, cash flow statement, and discusses other accounting topics such as capital expenditures, revenue expenditures, cost of capital, retained earnings, and current assets vs current liabilities.
This document discusses long-term financial planning and growth. It covers elements of financial planning like investment decisions, capital structure decisions, and dividend policy decisions. It also discusses the financial planning process, including making assumptions and scenarios. The role of financial planning is to examine interactions between decisions, explore options, avoid surprises, and ensure internal consistency. The document provides examples of pro forma financial statements and how to calculate a company's internal growth rate and sustainable growth rate to determine how much a company can grow using internal financing versus requiring external financing.
1) The document discusses prospective analysis and financial forecasting. It provides steps for projecting a company's income statement, balance sheet, and cash flows based on historical trends and ratios.
2) Key steps include projecting sales, expenses, assets, liabilities, and cash balances. Assumptions must be made for variables like sales growth, gross margins, capital expenditures.
3) Sensitivity analysis is recommended to understand which assumptions most impact projections and develop best-case, worst-case scenarios. Prospective analysis supports valuation models requiring future financial estimates.
The document discusses prospective financial analysis and forecasting. It explains that prospective analysis includes forecasting financial statements and valuations. The best way to forecast is to project income statements, balance sheets, and cash flows comprehensively. It provides steps for forecasting Target Corporation's income statement, balance sheet, and cash flows for 2006. Sensitivity analysis and interim forecasts are also important parts of the projection process.
Prospective analysis involves forecasting future financial statements. It is important for:
1. Security valuation, as models require estimates of future performance.
2. Examining the viability of companies' strategic plans and whether plans will generate sufficient cash flows.
3. Creditors to assess a company's ability to meet debt obligations both short and long-term.
This document discusses return on invested capital (ROIC) and profitability analysis. It defines ROIC as income divided by invested capital and identifies three key applications of ROIC: (1) measuring managerial effectiveness, (2) measuring profitability, and (3) as a measure for planning and control. The document outlines different measures of invested capital, including net operating assets and stockholders' equity. It also discusses how to calculate ROIC using these measures and the importance of making adjustments to invested capital and income numbers for effective analysis.
This document discusses analyzing earnings persistence, which is key to effective equity analysis and valuation. It describes two common methods for assessing earnings persistence: recasting and adjusting the income statement. Recasting rearranges earnings components to provide a meaningful classification, while adjusting aims to assign earnings components to the periods they best belong. The document also identifies factors that determine earnings persistence, such as earnings trends, variability, earnings management, and management incentives.
This document discusses concepts related to analyzing a company's operating activities through its financial statements. It covers topics such as economic versus permanent income, revenue and expense recognition criteria, non-recurring items, deferred charges, employee stock options, interest costs, and income taxes. The key concepts are that economic income includes both recurring and non-recurring components, while permanent income reflects a company's stable average earnings power. It also discusses adjusting the income statement and balance sheet for non-recurring items to better assess a company's core operating performance.
This document discusses the statement of cash flows and cash flow analysis. It begins by explaining the relevance of cash flows and the statement of cash flows. The statement of cash flows reports cash receipts and payments categorized by operating, investing, and financing activities. It can be constructed using either the direct or indirect method. The indirect method adjusts net income for non-cash items to determine cash flows from operations. Cash flow analysis helps assess a company's liquidity, solvency, and financial flexibility. Ratios like the cash flow adequacy ratio and cash reinvestment ratio can provide additional insights.
Financial Reporting And Analysis Explained.as to why is it important, Who is it important for and the different ways of analyzing a financial statement.
Greenwich University
This document discusses several financial analysis techniques including horizontal analysis, vertical analysis, common-size statements, price-earnings ratios, dividend payout ratios, and financial leverage. It provides examples of calculating key financial ratios such as gross margin percentage, earnings per share, price-earnings ratio, dividend payout ratio, return on assets, return on equity, book value per share, current ratio, and acid-test ratio. The document also discusses how to interpret trends in financial statement items over multiple years.
The document discusses key concepts related to financial reporting including:
1) Financial reporting provides formal records of a company's financial activities primarily for external users like shareholders and internal users like management. Annual reports contain key documents like directors reports and financial statements.
2) There are various forms of business organization but joint stock companies have features like limited liability, transferable shares, and elected management through directors.
3) The objective of financial reporting is to provide useful information to investors and creditors to make decisions about providing resources to an entity. Reports are limited and users need other sources of information as well.
The statement of cash flows shows how a company's operating, investing, and financing activities affected cash during an accounting period. It explains the net increase or decrease in cash. Cash includes cash equivalents such as money market accounts and treasury bills. The statement of cash flows classifies cash flows into operating, investing, and financing activities to provide information about cash receipts and payments. Adjustments must be made to the income statement to convert accrual-based figures to a cash basis for the operating activities section.
Financial statement analysis involves analyzing a company's financial statements to assess its performance and financial position. It is used to evaluate factors like profitability, solvency, liquidity, and efficiency. Key tools for financial statement analysis include financial ratios, common size analysis, trend analysis, and comparisons to industry standards and past performance. The purpose is to provide useful information to decision makers about a company's historical performance, current condition, and future prospects.
The document provides an overview of financial statement analysis. It discusses that financial analysis identifies the financial strengths and weaknesses of a firm by establishing relationships between balance sheet and profit/loss statement items. The key objectives of financial analysis are to evaluate a firm's profitability, debt servicing ability, business risk, and growth. Various techniques of financial analysis are also outlined, including comparative statements analysis, common-size analysis, trend analysis, and ratio analysis. The document aims to explain the concepts and applications of financial statement analysis.
This document provides an overview of financial statement analysis. It discusses evaluating business prospects and risks through credit analysis, equity analysis, accounting analysis, and financial analysis. These analyses examine a company's liquidity, solvency, profitability, and cash flows. Ratio analysis and valuation methods are also covered. The purpose is to evaluate a company's performance and financial position over time using its financial statements and additional information.
The document provides an overview of financial statements, including balance sheets, cash flow statements, and notes. It explains that a balance sheet summarizes a company's financial position at a point in time by listing assets, liabilities, and shareholder equity. It also describes the major components of each type of financial statement and provides sample notes to the financial statements that give additional context and details. The cash flow statement tracks cash inflows and outflows from operating, investing, and financing activities over a period of time. Understanding these statements is important for assessing a company's financial strength and cash flows.
This document summarizes key points from Chapter 11 on equity analysis and valuation. It discusses recasting financial statements to separate recurring from non-recurring earnings components. Earnings persistence, determinants of persistence, and their relevance for forecasting are analyzed. Earnings-based valuation is described, emphasizing the use of earnings and accounting measures to compute company value. The importance of analyzing earning power and forecasting earnings for valuation purposes is also explained. Several tools for equity analysis and techniques for recasting, adjusting, and forecasting earnings are outlined.
This document provides an analysis of financial statements including the balance sheet, trial balance, and differences between them. It discusses how a balance sheet is organized according to order of permanence or liquidity with assets on one side and liabilities/capital on the other. The trial balance contains debit and credit balances of all accounts to test accuracy, while the balance sheet incorporates only asset and liability balances to ascertain financial position on a given date. It also outlines the differences between a profit and loss account, which shows revenues/expenses over time, and a balance sheet, which presents assets, liabilities and capital at a point in time.
This document discusses the analysis of financial statements through various tools and techniques. It begins by defining financial statement analysis and outlining its purpose. It then explains key tools for analysis like comparative statements, common size statements, trend analysis, and ratio analysis. Various types of ratios are classified like liquidity, leverage, activity, and profitability ratios. The document also discusses the interpretation of analysis and interested parties that use financial statement analysis.
The document discusses key financial statements that provide information about a company's financial performance and position. It describes the income statement as showing revenues, expenses and profits over a period of time. The balance sheet provides a snapshot of assets, liabilities and shareholders' equity as of a point in time. The cash flow statement reports cash inflows and outflows during a period. Understanding these statements allows analysis of a company's current and future financial condition.
Finance for Non Financial Managers 6th Edition Bergeron Test BankSandraBentonss
fULL DOWNLOAD : https://alibabadownload.com/product/finance-for-non-financial-managers-6th-edition-bergeron-test-bank/ Finance for Non Financial Managers 6th Edition Bergeron Test Bank , Finance for Non Financial Managers,Bergeron,6th Edition,Test Bank
The document defines key accounting terms like assets, liabilities, equity, accounts receivable, accounts payable, accrued liabilities, and provides explanations of accounting concepts like the accounting equation, accrual basis accounting, and balance sheet. It also summarizes key financial statements including the income statement, cash flow statement, and discusses other accounting topics such as capital expenditures, revenue expenditures, cost of capital, retained earnings, and current assets vs current liabilities.
This document discusses long-term financial planning and growth. It covers elements of financial planning like investment decisions, capital structure decisions, and dividend policy decisions. It also discusses the financial planning process, including making assumptions and scenarios. The role of financial planning is to examine interactions between decisions, explore options, avoid surprises, and ensure internal consistency. The document provides examples of pro forma financial statements and how to calculate a company's internal growth rate and sustainable growth rate to determine how much a company can grow using internal financing versus requiring external financing.
1) The document discusses prospective analysis and financial forecasting. It provides steps for projecting a company's income statement, balance sheet, and cash flows based on historical trends and ratios.
2) Key steps include projecting sales, expenses, assets, liabilities, and cash balances. Assumptions must be made for variables like sales growth, gross margins, capital expenditures.
3) Sensitivity analysis is recommended to understand which assumptions most impact projections and develop best-case, worst-case scenarios. Prospective analysis supports valuation models requiring future financial estimates.
The document discusses prospective financial analysis and forecasting. It explains that prospective analysis includes forecasting financial statements and valuations. The best way to forecast is to project income statements, balance sheets, and cash flows comprehensively. It provides steps for forecasting Target Corporation's income statement, balance sheet, and cash flows for 2006. Sensitivity analysis and interim forecasts are also important parts of the projection process.
Prospective analysis involves forecasting future financial statements. It is important for:
1. Security valuation, as models require estimates of future performance.
2. Examining the viability of companies' strategic plans and whether plans will generate sufficient cash flows.
3. Creditors to assess a company's ability to meet debt obligations both short and long-term.
This document is the 2006 annual report for Fannie Mae. It includes a letter to shareholders from the CEO, Daniel H. Mudd, summarizing the company's financial performance for 2005-2006. Key points include net income of $6.3 billion in 2005 and $4.1 billion in 2006, earnings per share of $6.01 in 2005 and $3.65 in 2006, and a mortgage credit book of business that grew 7% to $2.5 trillion in 2006. The report discusses challenges from restating past financials and rebuilding internal controls and governance.
This document is a financial supplement from Genworth Financial for the fourth quarter of 2006. It includes sections on financial highlights, results by business segment, investments, and other financial data. Some key details include:
- Total stockholders' equity was $13.3 billion as of December 31, 2006. Book value per common share was $30.09.
- Return on equity was 11.1% for 2006 on a GAAP basis and 11.0% on an operating basis.
- Net income and various performance metrics are provided by segment, including Retirement and Protection, International, and U.S. Mortgage Insurance.
- Additional data on investments, deferred acquisition costs, and non-GA
This document is a financial supplement from Genworth Financial for the fourth quarter of 2006. It includes sections on financial highlights, results by business segment, investments, and other financial data. Some key details include:
- Total stockholders' equity was $13.3 billion as of December 31, 2006. Book value per common share was $30.09.
- Return on equity was 11.1% for 2006 on a GAAP basis and 11.0% on an operating basis.
- Net income and various performance metrics are provided by segment, including Retirement and Protection, International, and U.S. Mortgage Insurance.
- Additional data on investments, deferred acquisition costs, and non-GA
This business plan is for Take Five Sports Bar & Grill, which currently operates one successful location. The plan aims to expand to five additional locations over the next two years. The first location exceeded projections, grossing over $2 million in its first year. The plan expects sales to grow to $25 million by 2000, generating over $5.6 million in net income as new locations are added. Keys to success include maintaining quality food and service, controlling costs, and implementing management controls to ensure consistency across locations.
valero energy Quarterly and Other SEC Reports 2005 1stfinance2
This document contains statements of computations of ratios of earnings to fixed charges and preferred stock dividends for Valero Energy Corporation for the three months ended March 31, 2005 and years ended December 31, 2004 through 2000. It provides calculations of earnings, fixed charges, and ratios for each period. Earnings are defined as income before taxes and other items. Fixed charges include interest expense, capitalized interest, and estimates of interest within rental expense. The ratios compare earnings to fixed charges and earnings to fixed charges and preferred stock dividends, with higher ratios indicating a greater ability to meet payment obligations. Ratios ranged from 8.5x to 1.3x over the periods presented.
This document provides an introduction to managerial accounting concepts. It defines managerial accounting as providing internal reports customized for management decision making, as opposed to external financial reporting. It notes managerial accounting involves actual and estimated future financial data. The main topics covered include accumulating costs, analyzing costs, evaluating performance, and comparing alternatives. It states the goal is to generate profit by controlling costs, which impact profitability. Managerial accounting is relevant for service, merchandising, and manufacturing businesses.
This document provides a financial analysis of Saudi Telecom Corporation (STC) and a comparison with its competitor Mobily. It includes a SWOT analysis, industry analysis using Porter's Five Forces, and an analysis of key financial ratios for STC. It also discusses sources of internal and external finance available to STC, budgeting, and concludes with recommendations for performance enhancement. Financial data for STC such as net revenue, net income, cash flow, market capitalization, and dividend yield are presented alongside the same metrics for Mobily to facilitate comparison between the two companies.
This document provides an overview of the exercises, problems, cases, and internet assignment in Chapter 9 of the textbook. It includes a table that lists each exercise/problem/case topic, the relevant learning objectives, and characteristics. It also provides brief descriptions of each problem, case, and the internet assignment, including estimated completion times and difficulty ratings. The chapter covers topics like capital vs. revenue expenditures, depreciation methods, accounting for plant and intangible assets, natural resources, and annual report presentations.
The document discusses various accounting concepts related to adjusting accounts and preparing financial statements. It includes questions about the differences between cash basis and accrual basis accounting, examples of accounts that require adjustment such as prepaid expenses, depreciation, accrued revenues and expenses, and unearned revenues. It also provides examples of adjusting journal entries companies would make.
FINANCIAL ACCOUNTING PRINCIPLES Assessment 4: Accounting for Liabilities and ...JanaNildof
1. Data Resources, Inc. engaged in short-term financing transactions in 2011-2012 involving accounts payable, notes payable, and accrued interest. Journal entries are required to record these transactions, including notes maturing on April 29, 2012, June 16, 2012, and January 30, 2012.
2. Fromer issued $3 million of 12-year bonds on January 1, 2012 at a discount. Semi-annual interest payments are due on June 30 and December 31 each year. Journal entries are needed to record the bond issuance and amortize the discount over the life of the bonds.
3. TransWorld Inc. had stockholder equity transactions in 2011, including treasury stock purchases
energy future holindings QuarterlyFinancialsProFormasfinance29
This document provides unaudited pro forma condensed consolidated financial statements for Texas Competitive Electric Holdings Company LLC (TCEH) that give effect to TCEH's merger with EFH Corp. and related financing transactions. The pro forma adjustments include:
1) Allocating the estimated purchase price from the merger to tangible and intangible assets and liabilities based on preliminary fair value estimates
2) Reflecting the impact of new debt issued and existing debt repaid to complete the merger
3) Adjusting historical financials to reflect the merger and related transactions as if they occurred on January 1, 2006
energy future holindings TCEHHoldingsQuarterlyFinancialsProFormasfinance29
This document provides unaudited pro forma condensed consolidated financial statements for Texas Competitive Electric Holdings Company LLC (TCEH) that give effect to TCEH's merger with EFH Corp. and related financing transactions. The pro forma adjustments include:
1) Allocating the estimated purchase price from the merger to reflect the fair values of TCEH's assets and liabilities.
2) Adjusting for the impact of debt issued and retired to complete the merger.
3) Reflecting the historical results of certain assets contributed by EFH Corp. to TCEH.
The financial statements are intended to provide information on the estimated financial effects of the merger and are not indicative of TCEH
Archer Daniels Midland Company (ADM) is one of the largest agricultural processors in the world with operations in 60 countries. It processes crops like corn, wheat, soybeans, and cocoa into food ingredients, animal feed, renewable fuels and industrial products. In 2007, ADM achieved record earnings of $2.2 billion on $44 billion in sales, driven by strong commodity pricing and sales volumes. ADM is positioning itself to be a global leader in bioenergy by expanding its ethanol and biodiesel production capacity in the US and Brazil through new plants and technology research partnerships.
Ball Corporation's 2004 annual report summarizes the company's record financial results for the year. Key highlights include record sales of $5.44 billion, record earnings of $295.6 million, and record operating cash flow of $536 million. The company also increased its quarterly dividend by 33% and repurchased over $200 million of its own stock between 2001 and 2004. Ball Corporation, which was founded in 1880, celebrated its 125th anniversary in 2005 and looks forward to continued growth while maintaining its core values of integrity and respect for stakeholders.
Ball Corporation's 2004 annual report summarizes the company's strong financial performance in 2004, its 125th year in business. Key highlights include record sales of $5.44 billion, record earnings of $295.6 million, and record cash flow from operations of $536 million. The company significantly exceeded its goal of 10-15% annual earnings growth, with earnings per share increasing 29% in 2004. Ball Corporation uses its cash prudently, reinvesting in its businesses, making acquisitions, reducing debt, paying dividends, and buying back stock. It is building new plants and upgrading facilities to accommodate growth in its beverage can and aerospace businesses.
This business plan is for a start-up pizza delivery business called Take-Out Pizza, Inc. seeking $29,500 in investment and a $30,000 business loan to cover $101,500 in start-up costs. The plan projects that over 5 years the business will generate over $600,000 in cumulative net profits from average monthly sales of $72,000 while maintaining adequate liquidity. It includes sections on the company overview, products/services, market analysis, strategy, management, and financial projections. Confidentiality of the business plan contents is noted for any external readers.
The document discusses the drivers and pressures for organizational change. It identifies that change comes from both external environmental pressures such as competition, regulations and technological changes as well as internal pressures like growth, leadership changes, and politics. Some of the key external pressures mentioned are globalization, hypercompetition, and reputation concerns. The document also examines why organizations may not change in response to environmental pressures or after crises, citing factors such as organizational learning difficulties and defensive priorities over innovation.
This document discusses evolutionary developmental biology and how changes in development can lead to evolutionary changes. It provides examples of modularity and molecular parsimony which help explain this. Modularity means parts of the body and DNA can develop differently. Molecular parsimony means organisms share developmental toolkit genes. The document then discusses specific examples like stickleback fish pelvic spines being due to different Pitx1 expression, and Darwin's finches having beak shape variations due to differing Bmp4 and Calmodulin expression levels. Mechanisms of evolutionary change include changes in location, timing, amount, or kind of gene expression.
Developmental plasticity allows an organism's phenotype to change in response to environmental conditions during development. There are two main types of phenotypic plasticity: reaction norms, where the environment determines the phenotype from a continuum of genetic possibilities, and polyphenisms, where discrete alternative phenotypes are produced. Examples include caterpillars changing appearance to match plant growth stages, frogs hatching early in response to vibrations, and temperature determining sex in crocodiles. Stressors like water levels can also influence development, as seen in spadefoot toads. Symbiotic relationships between organisms, like nitrogen-fixing bacteria in plant roots, are important to development and often involve vertical transmission from parents. Gut bacteria are also necessary for
This document discusses several genetic and environmental factors that can influence human development. Genetic factors like pleiotropy and mosaicism can result in syndromes with multiple abnormalities. The same genetic mutation can also produce different phenotypes depending on gene interactions. Environmental teratogens during critical periods of embryonic development can irreversibly damage organ formation, with alcohol, retinoic acid, and endocrine disruptors like bisphenol A and atrazine posing particular risks like fetal alcohol syndrome, cleft palate, lower sperm counts, and cancer. Both genetic and environmental heterogeneity contribute to the complexity of human development.
The endoderm forms the epithelial lining of the digestive and respiratory systems. It gives rise to tissues like the notochord, heart, blood vessels, and parts of the mesoderm. The endoderm comes from two sources - the definitive endoderm and the visceral endoderm. The transcription factor Sox17 marks and regulates the formation of the endoderm. The endoderm lines tubes in the body and gives rise to organs like the liver, pancreas, lungs and digestive system through the formation of buds and pouches along the foregut.
The document summarizes the development of the intermediate mesoderm and lateral plate mesoderm. The intermediate mesoderm forms the urogenital system including the kidneys, ureters, ovaries, fallopian tubes, testes and vas deferens. Kidney development occurs through the pronephros, mesonephros and metanephros stages. The lateral plate mesoderm splits into somatic and splanchnic layers and forms the heart through the merging of cardiac progenitor cells from both sides of the embryo. The heart tube loops to the right to begin resembling the four-chambered adult heart.
The paraxial mesoderm lies just lateral to the notochord and gives rise to vertebrae, skeletal muscles, and skin connective tissue. It is divided into somites which then form dermomyotomes and sclerotomes. Dermomyotomes develop into dermatomes that make dermis and myotomes that form back, rib, and body wall muscles. Sclerotomes form the vertebrae and rib cage. Somitogenesis occurs through a clock-wavefront model where somites sequentially segment from cranial to caudal regions under the influence of signaling molecules like retinoic acid and FGF.
The document summarizes ectodermal placodes and the epidermis. It discusses how placodes give rise to sensory structures like the eye lens, inner ear, and nose. It describes the different cranial placodes that form sensory tissues and nerves, including the anterior placodes that form the pituitary gland and eye lens. The intermediate placodes form nerves involved in sensation of the face and hearing/balance. The epidermis derives from surface ectoderm under the influence of BMPs and forms the protective outer layer of skin and its appendages like hair, sweat glands, and teeth.
- The neural plate transforms into a neural tube through a process called neurulation regulated by proteins like BMP and transcription factors like Sox1, 2, and 3.
- Primary neurulation involves the elongation, bending, and convergence of the neural folds before their closure at the midline to form the neural tube. Key regulation events involve hinge points at the midline and dorsolateral edges.
- Neural tube defects can occur if closure fails, as in spina bifida where the posterior neuropore remains open, preventing proper spinal cord development.
Mammalian development begins with fertilization and cleavage of the egg. The egg develops membranes that allow development outside of water. In mammals, the placenta exchanges gases and nutrients between the embryo and mother. Cleavage is rotational, with zygotic genes activating later than other animals. Cells compact and the morula forms an inner cell mass and trophoblast cells. The trophoblast secretes fluid to form a blastocyst cavity. The inner cell mass forms the epiblast and hypoblast, which generate the embryo and extraembryonic tissues through gastrulation. Axis formation is guided by gradients of genes like HOX and left/right asymmetries are regulated by proteins including Nodal.
- Drosophila melanogaster is a useful model organism for studying development due to its short life cycle, fully sequenced genome, and ease of breeding.
- Early Drosophila development involves syncytial cleavage where nuclei divide without cell division, specifying the dorsal/ventral and anterior/posterior axes.
- Fertilization occurs when sperm enters an egg that has already begun specifying axes; maternal and paternal chromosomes remain separate during early divisions.
This document summarizes key patterns in animal development. It describes that animals undergo gastrulation where cells migrate to form germ layers and axes. Animals are categorized into 35 phyla based on features like germ layers, organ formation, and cleavage patterns. It describes that diploblastic animals have two germ layers while most are triploblastic with three germ layers. Triploblastic animals are further divided into protostomes and deuterostomes based on mouth formation. The document also provides examples of cleavage patterns in snails which are spirally arranged in either a dextral or sinistral pattern determined by maternal factors.
1) Sex determination in mammals is primarily determined by the XY sex determination system, with females having XX and males having XY. The SRY gene on the Y chromosome causes the development of testes.
2) The gonads are initially bipotential but develop into either ovaries or testes based on the sex chromosomes. Testes secrete AMH and testosterone to direct male development while ovaries secrete estrogens for female development.
3) Gametogenesis includes the process of meiosis which produces haploid gametes from diploid germ cells in the gonads. In females, oogenesis begins in the embryo but arrests until puberty while spermatogenesis only occurs at puberty in males.
Stem cells are unspecialized cells that can divide and differentiate into specialized cell types. There are several types of stem cells defined by their potency, including totipotent stem cells found in early embryos, pluripotent stem cells in the embryo, and multipotent adult stem cells. Stem cell regulation is controlled through extracellular signals from the stem cell niche and intracellular factors that influence gene expression and cell fate. Researchers have also induced pluripotency in adult cells by introducing genes that code for key transcription factors.
This document discusses cell-to-cell communication and how it allows for the development of specialized tissues and organs through three main mechanisms: cell adhering, cell shape changing, and cell signaling. It describes how cells interact at the cell membrane through various receptor and ligand proteins. These interactions can be homophilic or heterophilic, and occur through direct contact between neighboring cells (juxtacrine signaling) or over short distances (paracrine signaling). Differential adhesion and cadherins allow cells to sort themselves into tissues based on adhesion strengths. The extracellular matrix and integrins also influence cell communication and development.
Differential gene expression refers to the process where different genes are activated in different cell types, leading to cellular specialization. While all cells contain the full genome, only a small percentage of genes are expressed in each cell. Gene expression is regulated at multiple levels, including differential transcription, selective pre-mRNA processing, selective mRNA translation, and posttranslational protein modification. The most common mechanisms involve regulating transcription through epigenetic modifications of chromatin and the use of transcription factors.
The document summarizes key stages in animal development from fertilization through organogenesis. It begins with fertilization and cleavage, followed by gastrulation where the three germ layers (endoderm, mesoderm, ectoderm) are formed. During organogenesis, organs develop from the germ layers. Metamorphosis may also occur to transition organisms like frogs from immature to sexually mature forms. Examples are provided of developmental processes in frogs and other model organisms like fruit flies and plants. Cell behavior and patterning during these stages are also discussed.
The document discusses considerations for small businesses when hiring employees. It covers deciding when to hire an employee, defining job roles, writing job descriptions, attracting and evaluating candidates, selecting the right hire, training employees, rewarding and compensating employees, and managing ownership and dividends when there are family business partners involved. The key aspects of setting up an employee program for a small business are planning job roles, writing thorough job descriptions, developing fair hiring and review processes, providing training, and establishing clear compensation and ownership structures.
This document discusses various legal issues that small business owners should be aware of, including:
- Understanding the different types of laws (federal, state, local) that may apply to a small business.
- Hiring an experienced small business attorney to provide legal advice and represent the business as needed.
- Choosing an appropriate legal structure for the business, such as a sole proprietorship, partnership, corporation, or LLC.
- Protecting the business name as intellectual property and complying with regulations regarding contracts, liability, taxation and other legal matters.
This document discusses risk management and insurance for small businesses. It begins by defining risk for business owners and identifying common sources of risk such as financial investments, theft, nonpayment of debts, and natural disasters. It then examines risks related to a business's property, personnel, customers, and intangible property. The document provides strategies for managing these risks, such as developing policies and procedures, securing valuable assets, and obtaining different types of insurance. It concludes by discussing ways for businesses to share risk through joint ventures, industry groups, and government funding programs.
Temple of Asclepius in Thrace. Excavation resultsKrassimira Luka
The temple and the sanctuary around were dedicated to Asklepios Zmidrenus. This name has been known since 1875 when an inscription dedicated to him was discovered in Rome. The inscription is dated in 227 AD and was left by soldiers originating from the city of Philippopolis (modern Plovdiv).
🔥🔥🔥🔥🔥🔥🔥🔥🔥
إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
🔥🔥🔥🔥🔥🔥🔥🔥🔥
Philippine Edukasyong Pantahanan at Pangkabuhayan (EPP) CurriculumMJDuyan
(𝐓𝐋𝐄 𝟏𝟎𝟎) (𝐋𝐞𝐬𝐬𝐨𝐧 𝟏)-𝐏𝐫𝐞𝐥𝐢𝐦𝐬
𝐃𝐢𝐬𝐜𝐮𝐬𝐬 𝐭𝐡𝐞 𝐄𝐏𝐏 𝐂𝐮𝐫𝐫𝐢𝐜𝐮𝐥𝐮𝐦 𝐢𝐧 𝐭𝐡𝐞 𝐏𝐡𝐢𝐥𝐢𝐩𝐩𝐢𝐧𝐞𝐬:
- Understand the goals and objectives of the Edukasyong Pantahanan at Pangkabuhayan (EPP) curriculum, recognizing its importance in fostering practical life skills and values among students. Students will also be able to identify the key components and subjects covered, such as agriculture, home economics, industrial arts, and information and communication technology.
𝐄𝐱𝐩𝐥𝐚𝐢𝐧 𝐭𝐡𝐞 𝐍𝐚𝐭𝐮𝐫𝐞 𝐚𝐧𝐝 𝐒𝐜𝐨𝐩𝐞 𝐨𝐟 𝐚𝐧 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫:
-Define entrepreneurship, distinguishing it from general business activities by emphasizing its focus on innovation, risk-taking, and value creation. Students will describe the characteristics and traits of successful entrepreneurs, including their roles and responsibilities, and discuss the broader economic and social impacts of entrepreneurial activities on both local and global scales.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
THE SACRIFICE HOW PRO-PALESTINE PROTESTS STUDENTS ARE SACRIFICING TO CHANGE T...indexPub
The recent surge in pro-Palestine student activism has prompted significant responses from universities, ranging from negotiations and divestment commitments to increased transparency about investments in companies supporting the war on Gaza. This activism has led to the cessation of student encampments but also highlighted the substantial sacrifices made by students, including academic disruptions and personal risks. The primary drivers of these protests are poor university administration, lack of transparency, and inadequate communication between officials and students. This study examines the profound emotional, psychological, and professional impacts on students engaged in pro-Palestine protests, focusing on Generation Z's (Gen-Z) activism dynamics. This paper explores the significant sacrifices made by these students and even the professors supporting the pro-Palestine movement, with a focus on recent global movements. Through an in-depth analysis of printed and electronic media, the study examines the impacts of these sacrifices on the academic and personal lives of those involved. The paper highlights examples from various universities, demonstrating student activism's long-term and short-term effects, including disciplinary actions, social backlash, and career implications. The researchers also explore the broader implications of student sacrifices. The findings reveal that these sacrifices are driven by a profound commitment to justice and human rights, and are influenced by the increasing availability of information, peer interactions, and personal convictions. The study also discusses the broader implications of this activism, comparing it to historical precedents and assessing its potential to influence policy and public opinion. The emotional and psychological toll on student activists is significant, but their sense of purpose and community support mitigates some of these challenges. However, the researchers call for acknowledging the broader Impact of these sacrifices on the future global movement of FreePalestine.
How to Setup Default Value for a Field in Odoo 17Celine George
In Odoo, we can set a default value for a field during the creation of a record for a model. We have many methods in odoo for setting a default value to the field.
How to Download & Install Module From the Odoo App Store in Odoo 17Celine George
Custom modules offer the flexibility to extend Odoo's capabilities, address unique requirements, and optimize workflows to align seamlessly with your organization's processes. By leveraging custom modules, businesses can unlock greater efficiency, productivity, and innovation, empowering them to stay competitive in today's dynamic market landscape. In this tutorial, we'll guide you step by step on how to easily download and install modules from the Odoo App Store.
3. 9-3
Prospective Analysis
Security Valuation - free cash flow and residual
income models require estimates of future financial
statements.
Management Assessment - forecasts of financial
performance examine the viability of companies’
strategic plans.
Assessment of Solvency - useful to creditors to
assess a company’s ability to meet debt service
requirements, both short-term and long-term.
Importance
4. 9-4
The Projection Process
Projected Income Statement
Sales forecasts are a function of:
1) Historical trends
2) Expected level of macroeconomic activity
3) The competitive landscape
4) New versus old store mix (strategic
initiatives)
5. 9-5
The Projection Process
Target Corporation Income Statements
(in millions) 2005 2004 2003
Sales.......................................................................................... $46,839 $42,025 $37,410
Cost of goods sold ..................................................................... 31,445 28,389 25,498
Gross profit................................................................................ 15,394 13,636 11,912
Selling, general and administrative expense ............................. 10,534 9,379 8,134
Depreciation and amortization expense ..................................... 1,259 1,098 967
Interest expense......................................................................... 570 556 584
Income before tax ...................................................................... 3,031 2,603 2,227
Income tax expense.................................................................... 1,146 984 851
Income (loss) from extraordinary items
and discontinued operations................................................. 1,313 190 247
Net income................................................................................. $ 3,198 $ 1,809 $ 1,623
Outstanding shares ................................................................... 891 912 910
Selected Ratios (in percent)
Sales growth............................................................................ 11.455% 12.336%
Gross profit margin.................................................................. 32.866 32.447
Selling, general and administrative expense/Sales ................. 22.49 22.318
Depreciation expense/Gross prior-year PP&E ........................... 6.333 5.245
Interest expense/Prior-year long-term debt .............................. 5.173 4.982
Income tax expense/Pretax income........................................... 37.809 37.803
6. 9-6
The Projection Process
Steps:
1. Project sales
2. Project cost of goods sold and gross profit margins using
historical averages as a percent of sales
3. Project SG&A expenses using historical averages as a
percent of sales
4. Project depreciation expense as an historical average
percentage of beginning-of-year depreciable assets
5. Project interest expense as a percent of beginning-of-
year interest-bearing debt using existing rates if fixed
and projected rates if variable
6. Project tax expense as an average of historical tax
expense to pre-tax income
Projected Income Statement
7. 9-7
The Projection Process
Target Corporation Projected Income Statement
1. Sales: $52,204 = $46,839 x 1.11455
2. Gross profit: $17,157 = $52,204 x 32.866%
3. Cost of goods sold: $35,047 = $52,204 - $17,157
4. Selling, general, and administrative: $11,741 = $52,204 x 22.49%
5. Depreciation and amortization: $1,410 =
$22,272 (beginning-period PP&E gross) x 6.333%
6. Interest: $493 = $9,538 (beginning-period interest-bearing debt) x 5.173%
7. Income before tax: $3,513 = $17,157 - $11,741 - $1,410 - $493
8. Tax expense: $1,328 = $3,513 x 37.809%
9. Extraordinary and discontinued items: none
10. Net income: $2,185 = $3,513 - $1,328
8. 9-8
The Projection Process
Target Corporation Projected Income Statement
(in millions) Forecasting Step 2006 Estimate
Income statement
Total revenues......................................................................................... 1 $52,204
Cost of goods sold .................................................................................. 3 35,047
Gross profit............................................................................................. 2 17,157
Selling, general, and administrative expense ............................................ 4 11,741
Depreciation and amortization expense .................................................. 5 1,410
Interest expense...................................................................................... 6 493
Income before tax ................................................................................... 7 3,513
Income tax expense................................................................................. 8 1,328
Income (loss) from extraordinary items and discontinued operations ...... 9 0
Net income.............................................................................................. 10 $ 2,185
Outstanding shares ......................................................................... 891
Forecasting Assumptions (in percent)
Sales growth........................................................................................... 1 11.455%
Gross profit margin................................................................................. 1 32.866
Selling, general, and administrative expense/Sales ............................... 1 22.49
Depreciation expense/Gross prior-year PP&E .......................................... 1 6.333
Interest expense/Prior-year long-term debt............................................. 1 5.173
Income tax expense/Pretax income ......................................................... 1 37.809
9. 9-9
The Projection Process
Steps:
1. Project current assets other than cash, using projected sales
or cost of goods sold and appropriate turnover ratios as
described below.
2. Project PP&E increases with capital expenditures estimate
derived from historical trends or information obtained in the
MD&A section of the annual report.
3. Project current liabilities other than debt, using projected sales
or cost of goods sold and appropriate turnover ratios as
described below
4. Obtain current maturities of long-term debt from the long-term
debt footnote.
5. Assume other short-term indebtedness is unchanged from
prior year balance unless they have exhibited noticeable
trends.
(continued)
Projected Balance Sheet
10. 9-10
The Projection Process
Steps:
6. Assume initial long-term debt balance is equal to the prior
period long-term debt less current maturities from Step 4.
7. Assume other long-term obligations are equal to the prior
year’s balance unless they have exhibited noticeable trends.
8. Assume initial estimate of common stock is equal to the prior
year’s balance
9. Assume retained earnings are equal to the prior year’s
balance plus (minus) net profit (loss) and less expected
dividends.
10. Assume other equity accounts are equal to the prior year’s
balance unless they have exhibited noticeable trends.
Projected Balance Sheet
11. 9-11
The Projection Process
Target Corporation Balance Sheet
(in millions) 2005 2004 2003
Cash ..................................................................................$ 2,245 $ 708 $ 758
Receivables .......................................................................5,069 4,621 5,565
Inventories .........................................................................5,384 4,531 4,760
Other current assets ..........................................................1,224 3,092 852
Total current assets.......................................................13,922 12,952 11,935
Property, plant, and equipment (PP&E)..............................22,272 19,880 20,936
Accumulated depreciation .................................................5,412 4,727 5,629
Net property, plant, and equipment ...................................16,860 15,153 15,307
Other assets ......................................................................1,511 3,311 1,361
Total assets .......................................................................$32,293 $31,416 $28,603
Accounts payable...............................................................$ 5,779 $ 4,956 $ 4,684
Current portion of long-term debt......................................504 863 975
Accrued expenses ..............................................................1,633 1,288 1,545
Income taxes & other .........................................................304 1,207 319
Total current liabilities .................................................. 8,220 8,314 7,523
Deferred income taxes and other liabilities........................2,010 1,815 1,451
Long-term debt..................................................................9,034 10,155 10,186
Total liabilities ..............................................................19,264 20,284 19,160
Common stock ...................................................................74 76 76
Additional paid-in capital..................................................1,810 1,530 1,256
Retained earnings .............................................................11,145 9,526 8,111
Shareholders’ equity......................................................13,029 11,132 9,443
Total liabilities and net worth ............................................$32,293 $31,416 $28,603
Selected Ratios
Accounts receivable turnover rate....................................9.240 9.094 6.722
Inventory turnover rate.....................................................5.840 6.266 5.357
Accounts payable turnover rate .......................................5.441 5.728 5.444
Accrued expenses turnover rate .......................................28.683 32.628 24.214
Taxes payable/Tax expense...............................................26.527% 122.663% 37.485%
Dividends per share .........................................................$ 0.310 $ 0.260 $ 0.240
Capital expenditures (CAPEX)—in millions ......................3,012 2,671 3,189
CAPEX/Sales ....................................................................6.431% 6.356% 8.524%
12. 9-12
The Projection Process
Steps in Projection (Target)
1 Receivables: $5,650 = $52,204 (Sales)/9.24 (Receivable turnover).
2 Inventories: $6,001 = $35,047 (Cost of goods sold)/5.84 (Inventory turnover).
3 Other current assets: no change.
4 PP&E: $25,629 = $22,272 (Prior year’s balance) + $3,357 (Capital expenditure
estimate: estimated sales of $52,204 = 6.431% CAPEX/sales percentage).
5 Accumulated depreciation: $6,822 = $5,412 (Prior balance) + $1,410 (Depreciation
estimate).
6 Net PP&E: $18,807 = $25,629 - $6,822.
7 Other long-term assets: no change.
8 Accounts payable: $6,441 = $35,047 (Cost of goods sold)/5.441 (Payable
turnover).
9 Current portion of long-term debt: amount reported in long-term debt footnote
as the current maturity for 2006.
10 Accrued expenses: $1,820 $52,204 (Sales)/28.683 (Accrued expense turnover).
11 Taxes payable: $352 = $1,328 (Tax expense) x 26.527% (Tax payable/Tax
expense).
12 Deferred income taxes and other liabilities: no change.
13 Long-term debt: $8,283 = $9,034 (Prior year’s long-term debt) - $751 (Scheduled
current maturities from step 9).
14 Common stock: no change.
15 Additional paid-in capital: no change.
16 Retained earnings: $13,054 = $11,145 (Prior year’s retained earnings) + $2,185
(Projected net income) - $276 (Estimated dividends of $0.31 per share x 891
million shares).
17 Cash: amount needed to balance total liabilities and equity less steps (1)–(7).
13. 9-13
The Projection Process
Target Corporation Balance Sheet
Forecasting 2006 2005
(in millions) Step Estimate
Cash .......................................................................... 17 $ 1,402 $ 2,245
Receivables ............................................................... 1 5,650 5,069
Inventories................................................................. 2 6,001 5,384
Other current assets .................................................. 3 1,224 1,224
Total current assets ..................................... 14,277 13,922
Property, plant, and equipment.................................. 4 25,629 22,272
Accumulated depreciation ......................................... 5 6,822 5,412
Net property, plant, and equipment ........................... 6 18,807 16,860
Other assets .............................................................. 7 1,511 1,511
Total assets ................................................ $34,595 $32,293
Accounts payable....................................................... 8 $ 6,441 $ 5,779
Current portion of long-term debt.............................. 9 751 504
Accrued expenses ...................................................... 10 1,820 1,633
Income taxes & other ................................................. 11 352 304
Total current liabilities.................................... 9,364 8,220
Deferred income taxes and other liabilities................ 12 2,010 2,010
Long-term debt.......................................................... 13 8,283 9,034
Total liabilities ............................................. 19,657 19,264
Common stock ........................................................... 14 74 74
Additional paid-in capital.......................................... 15 1,810 1,810
Retained earnings ..................................................... 16 13,054 11,145
Shareholders’ equity ...................................... 14,938 13,029
Total liabilities and net worth......................... $34,595 $32,293
Selected Ratios
Accounts receivable turnover rate.................... 9.240 9.240
Inventory turnover rate.................................... 5.840 5.840
Accounts payable turnover rate ....................... 5.441 5.441
Accrued expenses turnover rate ...................... 28.683 28.683
Taxes payable/Tax expense............................. 26.527% 26.527%
Dividends per share......................................... $ 0.310 $ 0.310
Capital expenditures (CAPEX)—in millions......... 3,357 3,012
CAPEX/Sales ................................................. 6.431% 6.431%
14. 9-14
The Projection Process
• If the estimated cash balance is much
higher or lower, further adjustments can be
made to:
1. invest excess cash in marketable securities
2. reduce long-term debt and/or equity
proportionately so as to keep the degree of
financial leverage consistent with prior years.
Projected Balance Sheet
16. 9-16
The Projection Process
Sensitivity Analysis
• Vary projection assumptions to find those with
the greatest effect on projected profits and
cash flows
• Examine the influential variables closely
• Prepare expected, optimistic, and pessimistic
scenarios to develop a range of possible
outcomes
17. 9-17
Application of Prospective Analysis in the
Residual Income Valuation Model
The residual income valuation model defines equity value
at time t as the sum of current book value and the present
value of all future expected residual income:
where BVt is book value at the end of period t, RIt + n is residual income
in period t + n, and k is cost of capital (see Chapter 1). Residual income
at time t is defined as comprehensive net income minus a charge on
beginning book value, that is, RIt = NIt - (k x BVt - 1).
18. 9-18
Application of Prospective Analysis in
the Residual Income Valuation Model
In its simplest form, we can perform a
valuation by projecting the following
parameters:
-Sales growth.
-Net profit margin (Net income/Sales).
-Net working capital turnover (Sales/Net WC).
-Fixed-asset turnover (Sales/Fixed assets).
-Financial leverage (Operating assets/Equity).
-Cost of equity capital
20. 9-20
Trends in Value Drivers
The Residual Income valuation model defines residual income as:
RIt = NIt – (k X BVt-1)
= (ROEt – k) X BVt-1
Where ROE = NI/BVt-1
- Stock price is only impacted so long as ROE ≠ k
- Shareholder value is created so long as ROE > k
- ROE is a value driver as are its components
- Net Profit Margin
- Asset Turnover
- Financial leverage
Two relevant observations:
- ROEs tend to revert to a long-run equilibrium.
- The reversion is incomplete.