Jimmy Gentry presents "Teaching Financial Statements" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 4, 2014. Gentry is the Clyde M. Reed Teaching Professor at the University of Kansas' School of Journalism and Mass Communications.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
This presentation provides an update on both recently issued and forthcoming pronouncements of the Financial Accounting Standards Board (FASB). Through this presentation, you should be able to identify what changes are effective for your 2015 financial statements, including changes you may choose to early adopt.
This presentation provides an update on both recently issued and forthcoming pronouncements of the Financial Accounting Standards Board (FASB). Through this presentation, you should be able to identify what changes are effective for your 2015 financial statements, including changes you may choose to early adopt.
Financial governance and the role of the boardNICVA
A presentation from Peter McBride, CEO of Niamh and Charit of NICVA's Resources Committee on Financial governance and the role of the board. Presentation given at NICVA's Charity Finance Conference for Trustees on 8 November.
This presentation was made by Takatsugu Ochi, IASB, at the 18th Annual Meeting of OECD Senior Financial Management and Reporting Officials held at the OECD Conference Centre, Paris, on 1-2 March 2018
Here is Details study on Accounting Standard 5(AS-5) i.e. Net Profit & Loss for the Prior Period Items and Changes in Accounting Policy with amazing visual effects. Power Point Presentation on Accounting Standard 5
Mike Wong presents "Preparing Students for Jobs" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 5, 2014. Wong is the director of Career Services at Arizona State University's Walter Cronkite School of Journalism and Mass Communication.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
“Shadow Money: Unraveling Political Nonprofits’ Spending” was originally held on May 14, 2014.
Politics is a big business. Not only is big money publicly shelled out to get candidates elected, but hundreds of millions are spent on a secret political game – the shadow money world dominated by mysterious, politically active nonprofits. These groups take advantage of loopholes in the Internal Revenue Service’s rule book to build complex webs of entities – linked together by money – to win political races and keep the source of the money secret.
During this free, one-hour session from the Reynolds Center and the Center for Responsive Politics, you’ll learn where to find how this money is being spent on the issues important to your beat and how to begin unraveling the web of organizations behind it all. This training will touch on the basics of IRS and Federal Election Commission oversight and how these nonprofits stay under the radar.
YOU WILL LEARN:
How the Citizens United decision in 2010 by the U.S. Supreme Court allowed not only for-profit corporations and labor unions, but also politically active nonprofits, to flood unlimited amounts of money into the political system.
How politically active nonprofits, which spent $336 million on federal campaigns alone in 2012, operate under and outside the radar of the IRS and FEC, spending secret donor money from the federal to the local level.
What clues to look for when tracking a politically active nonprofit. This includes what key information on 990 forms, incorporation documents and disclosure forms will be most helpful in your reporting.
YOUR INSTRUCTOR
Russ Choma is the money-in-politics reporter at the Center for Responsive Politics’ OpenSecrets.org. His work has appeared in several publications including the Investigative Reporting Workshop, Nieman Watchdog, Politics Daily, Grist.org and MSNBC.com. His series, “Blown Away: Tracking stimulus grants for renewable energy,” found that more than 80 percent of the first $1 billion in grants to wind-energy companies went to foreign firms, and many renewable-energy projects that received stimulus cash were built well before President Obama was even inaugurated.
For more information about business journalism training, please visit http://businessjournalism.org.
Jimmy Gentry presents "Strictly Financials Sources" during the annual 2012 Reynolds Business Journalism Seminars, hosted by the Donald W. Reynolds National Center for Business Journalism.
For more information about free training for business journalists, please visit businessjournalism.org.
Financial governance and the role of the boardNICVA
A presentation from Peter McBride, CEO of Niamh and Charit of NICVA's Resources Committee on Financial governance and the role of the board. Presentation given at NICVA's Charity Finance Conference for Trustees on 8 November.
This presentation was made by Takatsugu Ochi, IASB, at the 18th Annual Meeting of OECD Senior Financial Management and Reporting Officials held at the OECD Conference Centre, Paris, on 1-2 March 2018
Here is Details study on Accounting Standard 5(AS-5) i.e. Net Profit & Loss for the Prior Period Items and Changes in Accounting Policy with amazing visual effects. Power Point Presentation on Accounting Standard 5
Mike Wong presents "Preparing Students for Jobs" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 5, 2014. Wong is the director of Career Services at Arizona State University's Walter Cronkite School of Journalism and Mass Communication.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
“Shadow Money: Unraveling Political Nonprofits’ Spending” was originally held on May 14, 2014.
Politics is a big business. Not only is big money publicly shelled out to get candidates elected, but hundreds of millions are spent on a secret political game – the shadow money world dominated by mysterious, politically active nonprofits. These groups take advantage of loopholes in the Internal Revenue Service’s rule book to build complex webs of entities – linked together by money – to win political races and keep the source of the money secret.
During this free, one-hour session from the Reynolds Center and the Center for Responsive Politics, you’ll learn where to find how this money is being spent on the issues important to your beat and how to begin unraveling the web of organizations behind it all. This training will touch on the basics of IRS and Federal Election Commission oversight and how these nonprofits stay under the radar.
YOU WILL LEARN:
How the Citizens United decision in 2010 by the U.S. Supreme Court allowed not only for-profit corporations and labor unions, but also politically active nonprofits, to flood unlimited amounts of money into the political system.
How politically active nonprofits, which spent $336 million on federal campaigns alone in 2012, operate under and outside the radar of the IRS and FEC, spending secret donor money from the federal to the local level.
What clues to look for when tracking a politically active nonprofit. This includes what key information on 990 forms, incorporation documents and disclosure forms will be most helpful in your reporting.
YOUR INSTRUCTOR
Russ Choma is the money-in-politics reporter at the Center for Responsive Politics’ OpenSecrets.org. His work has appeared in several publications including the Investigative Reporting Workshop, Nieman Watchdog, Politics Daily, Grist.org and MSNBC.com. His series, “Blown Away: Tracking stimulus grants for renewable energy,” found that more than 80 percent of the first $1 billion in grants to wind-energy companies went to foreign firms, and many renewable-energy projects that received stimulus cash were built well before President Obama was even inaugurated.
For more information about business journalism training, please visit http://businessjournalism.org.
Jimmy Gentry presents "Strictly Financials Sources" during the annual 2012 Reynolds Business Journalism Seminars, hosted by the Donald W. Reynolds National Center for Business Journalism.
For more information about free training for business journalists, please visit businessjournalism.org.
Investigating Government Contractors was originally held April 22, 2014.
Contractors have literally become a fourth branch of government. Name a government function, and it’s a good bet that it’s being carried out by a contractor, including national security, as we’ve seen with NSA leaker Edward Snowden.
Some contractors, such as Lockheed Martin, get more federal dollars than several government agencies combined.
In this one-hour webinar, learn how to track local and national government spending on contractors in public databases and see examples of stories that have or could be done.
WHAT YOU WILL LEARN
How to find or FOIA public databases on spending on contractors at the federal and state levels.
What to look for in identifying stories on contractors.
How debarment of contractors works — or not.
YOUR INSTRUCTOR
Ron Nixon is a domestic correspondent in the Washington Bureau of The New York Times, where he has worked since 2005. He is the former computer-assisted reporting editor at the Minneapolis Star Tribune and a former training director for Investigative Reporters and Editors.
John Cheves, investigative reporter at the Lexington Herald-Leader, presents during the Reynolds Center's free workshop, "Investigating the Business of Government," in Lexington, Ky.
For more information on business coverage training for journalists, please visit http://businessjournalism.org.
Jimmy Gentry presents "Understanding Financial Statements" during the Reynolds Center for Business Journalism's annual Business Journalism Week, Jan. 2, 2014. Gentry is the Clyde M. Reed Teaching Professor at the University of Kansas' School of Journalism and Mass Communications.
The annual event features two concurrent seminars, Business Journalism Professors and Strictly Financials for journalists.
For more information about business journalism training, please visit http://businessjournalism.org.
Jimmy Gentry presents "Understanding Financial Statements" during Reynolds Business Journalism Week 2013.
Reynolds Business Journalism Week is an all-expenses-paid seminar for journalists looking to enhance their business coverage, and professors looking to enhance or create business journalism courses.
For more information about business journalism training, please visit businessjournalism.org.
Jimmy Gentry presents "Teaching Financial Statements" during Reynolds Business Journalism Week 2013.
Reynolds Business Journalism Week is an all-expenses-paid seminar for journalists looking to enhance their business coverage, and professors looking to enhance or create business journalism courses.
For more information about business journalism training, please visit businessjournalism.org.
Jimmy Gentry presents "Financial Statements I" during the annual 2012 Reynolds Business Journalism Seminars, hosted by the Donald W. Reynolds National Center for Business Journalism. For more information about free training for business journalists, please visit businessjournalism.org.
Jimmy Gentry on 'Financial Statements I" at Reynolds Business Journalism Week, Feb. 4-7, 2011.
Reynolds Center for Business Journalism, BusinessJournalism.org, Arizona State University's Walter Cronkite School of Journalism.
Jimmy Gentry presents "Unlocking Financial Statements - Day 2," a business journalism Webinar for the Donald W. Reynolds National Center for Business Journalism.
To learn more about free training for business journalists, please visit businessjournalism.org.
This presentation was created by Babasab Patil, and all copyright belongs to him. Please visit his website at: http://sites.google.com/site/babambafinance/
Data journalist Steve Doig, the Knight Chair at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication, demonstrates 10 data sources you may never have heard of that can lend rich context to your business and economic stories and spark meaningful investigations.
“Developing an Effective Business Journalism Syllabus - Leverage! Using Existing Resources to Create a Killer Course" from Reynolds Business Journalism Week 2016 by Keith Herndon
“Marketing Your Work and Engaging Your Audience - Engaging Audiences to Promote Your Work” from Reynolds Business Journalism Week 2016 by Rebecca Blatt
Christina Leonard, Director of Reynolds Business Reporting Bureau at the Walter Cronkite School of Journalism and Mass Communication shared 30 Agriculture stories at this year's Ag Media Summit. Take a look at these 30 examples of unique agriculture coverage to help end your writer's block!
Pulitzer Prize winner, Michael J. Berens of The Seattle Times presents "Data Journalism 101," a three-hour, hands-on workshop for the Donald W. Reynolds National Center for Business Journalism at the Excellence in Journalism Conference in Nashville, Tenn. on Sept. 4, 2014.
Part 3 offers tips for creating your own databases.
For more business journalism training opportunities and resources, please visit http://businessjournalism.org.
Pulitzer Prize winner, Michael J. Berens of The Seattle Times presents "Data Journalism 101," a three-hour, hands-on workshop for the Donald W. Reynolds National Center for Business Journalism at the Excellence in Journalism Conference in Nashville, Tenn. on Sept. 4, 2014.
Part 1 provides an intro to databases and their importance to reporting.
For more business journalism training opportunities and resources, please visit http://businessjournalism.org.
More from Reynolds Center for Business Journalism (20)
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Explore Careers and College Majors is a new online, interactive, self-guided career, major and college planning system.
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NIDM (National Institute Of Digital Marketing) Bangalore Is One Of The Leading & best Digital Marketing Institute In Bangalore, India And We Have Brand Value For The Quality Of Education Which We Provide.
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The Impact of Artificial Intelligence on Modern Society.pdfssuser3e63fc
Just a game Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?Assignment 3
1. What has made Louis Vuitton's business model successful in the Japanese luxury market?
2. What are the opportunities and challenges for Louis Vuitton in Japan?
3. What are the specifics of the Japanese fashion luxury market?
4. How did Louis Vuitton enter into the Japanese market originally? What were the other entry strategies it adopted later to strengthen its presence?
5. Will Louis Vuitton have any new challenges arise due to the global financial crisis? How does it overcome the new challenges?
Jill Pizzola's Tenure as Senior Talent Acquisition Partner at THOMSON REUTERS...dsnow9802
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Want to move your career forward? Looking to build your leadership skills while helping others learn, grow, and improve their skills? Seeking someone who can guide you in achieving these goals?
You can accomplish this through a mentoring partnership. Learn more about the PMISSC Mentoring Program, where you’ll discover the incredible benefits of becoming a mentor or mentee. This program is designed to foster professional growth, enhance skills, and build a strong network within the project management community. Whether you're looking to share your expertise or seeking guidance to advance your career, the PMI Mentoring Program offers valuable opportunities for personal and professional development.
Watch this to learn:
* Overview of the PMISSC Mentoring Program: Mission, vision, and objectives.
* Benefits for Volunteer Mentors: Professional development, networking, personal satisfaction, and recognition.
* Advantages for Mentees: Career advancement, skill development, networking, and confidence building.
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Hector is VP of Professional Development at the PMI Silver Spring Chapter, and CEO of Bold PM. He's a mid-market growth product executive and changemaker. He works with mid-market product-driven software executives to solve their biggest growth problems. He scales product growth, optimizes ops and builds loyal customers. He has reduced customer churn 33%, and boosted sales 47% for clients. He makes a significant impact by building and launching world-changing AI-powered products. If you're looking for an engaging and inspiring speaker to spark creativity and innovation within your organization, set up an appointment to discuss your specific needs and identify a suitable topic to inspire your audience at your next corporate conference, symposium, executive summit, or planning retreat.
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Resumes, Cover Letters, and Applying OnlineBruce Bennett
This webinar showcases resume styles and the elements that go into building your resume. Every job application requires unique skills, and this session will show you how to improve your resume to match the jobs to which you are applying. Additionally, we will discuss cover letters and learn about ideas to include. Every job application requires unique skills so learn ways to give you the best chance of success when applying for a new position. Learn how to take advantage of all the features when uploading a job application to a company’s applicant tracking system.
2. Donald W. Reynolds National Center
For Business Journalism
At Arizona State University
Strictly Financials
2
3. n
n
n
n
n
James K. Gentry, Ph.D.
Clyde M. Reed Teaching Professor
School of Journalism and Mass Communications
University of Kansas
jgentry@ku.edu
Strictly Financials
3
7. Annual Report,10-K
n
n
n
n
n
Annual report,10-K wrap, 10-K
Auditor’s report: Clean, qualified?
MD&A or Management’s Discussion
and Analysis
Financial statements and footnotes
Management’s letter if annual report
Strictly Financials
7
8. Traditional Auditor’s Report
n
Independent auditor’s opinion on whether
financial statements are presented fairly in all
material respects, in accordance with GAAP:
n
n
n
n
We looked at these statements
They’re management’s responsibility; we’re just
here to express our opinion
We followed the rules in our audits and here’s
what an audit involves
In our opinion, the statements fairly present the
company’s position
Strictly Financials
8
9. Auditor’s Report by Category
n
n
n
n
Clean or Unqualified
Qualified
Disclaimer
Adverse
Strictly Financials
9
10. New Auditor’s Report
n
Combines traditional report with
“internal controls” requirement of
Sarbanes-Oxley Act
Strictly Financials
10
11. Sarbanes-Oxley Act of 2002
n
n
n
n
n
Response to abuses with Enron and
WorldCom as catalysts
New responsibilities, resources for SEC
Created PCAOB
Major emphasis on “internal controls”
More disclosure for public companies
Strictly Financials
11
12. Sarbanes-Oxley Act
n
n
Analysts must state potential conflicts of interest
Limited types of services accounting firms can
provide to public company clients
n
n
n
n
n
n
Companies disclose in 10-K the fees pay to auditors
Recent concerns
Consulting
CEO, CFO attest to accuracy, completeness, fairness
of financial statements
Rigorous penalties for fraud, other misdeeds
Clawbacks
Strictly Financials
12
13. Public Company Accounting
Oversight Board
n
n
n
n
n
n
Created by SOX to oversee accounting
Began operating in 2003
SEC appoints five members to five-year
terms
Two members must be or have been CPAs
All members must be “financially literate”
In 2008, Supreme Court upheld PCAOB but
said SEC couldn’t remove board members
Strictly Financials
13
14. PCAOB’s Duties
n
n
n
n
Set rules on “auditing, quality control,
ethics, independence, and other
standards…”
Conduct “inspections” of accounting
firms
Conduct “investigations and disciplinary
proceedings”
Enforce compliance with SOX
Strictly Financials
14
15. Section 404: Internal Controls
n
n
n
n
“Management Assessment of Internal
Controls”
Each 10-K must contain an “internal control
report” that:
States management is responsible for internal
control structure and procedures
Contains an assessment on effectiveness of
internal control structure and procedures
Strictly Financials
15
16. Management on the Spot
n
n
n
n
n
Section 404: Management must evaluate and
test internal controls over financial reporting,
including anti-fraud programs, annually.
Management certifies that it does (or doesn’t)
have adequate internal controls in place.
Independent board members easier to attract
Auditor attests to adequacy of controls.
Management to be forced to answer for
fraudulent activities, misconduct, etc.
Strictly Financials
16
17. Private Company Impact
n
n
n
n
n
Banks, insurers requiring companies to
embrace SOX.
Now most private firms have audited financial
statements
If private company owners want to sell to
public company, must be in compliance
Private equity funds more willing to invest in
companies in compliance
Best outside directors
Strictly Financials
17
18. Non-Profit Impact
n
n
n
n
n
Audit committees, independent members
CEO, CFO attest to accuracy, completeness,
fairness of financial statements
Financial statements more accessible
Codes of ethics
Rules governing transactions with “insiders”
Strictly Financials
18
19. Goal of accounting
n
Record, classify and report financial
transactions. To provide managers across the
organization with information that facilitates:
n
n
n
n
n
Control of activities and expenditures
Refinement of operational plans
Accountability
Reporting on project outcomes
Writing of bids for new funds
Strictly Financials
19
20. Goal of Finance
n
n
Maximize shareholder wealth as
reflected in market price of the stock
Achieving this goal requires financial
manager to focus on economic profit,
not accounting profit
Strictly Financials
20
21. Financial Decisions
n
n
Investing decisions: Types of assets
firm wants to hold.
Financing decisions: Acquisition of
funds needed to support long-term
investments.
Strictly Financials
21
27. Cash or Operating Cycle
(cont.)
n
“Cash”
n
n
n
n
Cash
Receivables and payables
Debt
Inventory
n
n
n
Raw materials
Work in progress
Finished goods
Strictly Financials
27
28. Cash or Operating Cycle
(cont.)
n
Sell product
n
n
n
Cash
n
n
n
Accounts receivable
Cash
Collect receivables as cash
Pay off payables
Start over
Strictly Financials
28
29. Accrual Method
n
n
n
n
Records revenues when the the “sale”
occurs
Records expenses when the bill is
received
IE, transactions enter the financial
records when they occur, not when
cash changes hands
Accrual method, therefore, shows
“scores,” not real spendable dollars
Strictly Financials
29
30. About These Numbers:
They’re Squishy
n
n
n
n
n
Goods will not necessarily be paid for
Goods are not necessarily going to be
kept
Inventory might be out of date, obsolete
or unsellable
Status of some inventory may be
uncertain
Intangible assets are estimates
Strictly Financials
30
31. About These Numbers:
They’re Squishy (cont.)
n
n
n
n
n
Machinery or other fixed assets might
be obsolete or falling apart long before
the so-called useful life is up
Goodwill
Accounting conventions
Timing issues
Bottom line: In many ways, statements
are a collection of estimates.
Strictly Financials
31
33. Income Statement or ...
n
n
n
Statement of earnings
Statement of operations
Statement of income and
comprehensive income
Strictly Financials
33
34. Income Statement
n
n
n
n
Covers a period of time, typically a year
or quarter
Reports income from ongoing activities
Reports income from activities beyond
management’s control (comprehensive
income)
Involves estimates
Strictly Financials
34
36. Income Statement
n
n
n
n
Sales or revenues
Cost of goods sold
Gross profit
Operating expenses
n
n
n
n
n
n
n
Sales, general and administrative
Depreciation, amortization
Operating profit
Other income/expenses
Interest
Income taxes
Net income or profit
Strictly Financials
36
37. Cost of Goods Sold
n
Expenses incurred in the cost of
manufacturing or creating or acquiring
the product the company sells.
Strictly Financials
37
38. Cost of Goods Sold
n
Manufacturer: What the company pays
for inventory, i.e. raw materials and
supplies used to make its product(s).
Includes price of raw materials plus cost
of turning it into a product, and
transportation costs, i.e. direct factory
labor, overhead costs, energy costs.
Inventory is largest percent of CGS for
manufacturer.
Strictly Financials
38
39. Cost of Goods Sold
n
n
Retailer: What the company pays
suppliers for the products it sells on its
shelves. Only the cost of merchandise
purchased for resale, not the cost of
providing the service to customers.
Service business: Since it doesn’t make
or sell a product per se, typically find a
modest CGS.
Strictly Financials
39
40. SGA
n
n
Includes office expenses, accounting,
shipping department, advertising, R&D,
depreciation and other expenses that
can’t be directly attributed to particular
items for sale.
Often includes depreciation and
amortization.
Strictly Financials
40
42. Thinking Inside the Box
n
Revenues
Minus cost of goods sold
Equals gross profit
Minus operating expenses
Equals operating profit
Minus or plus other expenses/income
Minus or plus interest expenses/income
Minus income taxes
n
Net income
n
n
n
n
n
n
n
Strictly Financials
42
43. Inside the Box Earnings
n
n
n
n
Sales or revenues
Cost of goods sold
Gross profit
Operating expenses
n
n
n
Sales, general and administrative
Depreciation, amortization
Operating profit
Strictly Financials
43
44. ‘One-Time’ Gains That
Reoccur
n
n
n
Don’t be fooled by extraordinary items
that make the net income look better
than it really is
Extraordinary items should be both
unusual in nature and infrequent in
occurrence
Examples: Writedowns, restructurings,
etc.
Strictly Financials
44
45. Earnings Per Share
n
n
Basic earnings per share
(Bloomberg)
Diluted earnings per share (Wall
Street Journal, fully diluted)
Strictly Financials
45
46. Calculating EPS
n
n
Basic: Net income for period divided by
weighted average number shares
outstanding.
Diluted: Net income for period divided
by weighted average number shares
outstanding for period, plus assumption
of exercise of all potentially dilutive
instruments.
Strictly Financials
46
47. Dividend
n
Company’s board of directors decides to
distribute a portion of a company's net income
to a class of its shareholders. The dividend is
most often quoted in terms of the dollar
amount each share receives (dividends per
share).
Strictly Financials
47
48. Dividend Payout Ratio
n
The percentage of a company’s net
income that is paid to shareholders in
dividends.
Strictly Financials
48
49. Dividend Payout Ratio
Dividend per share
Earnings per share
Dividend payout
Net Income for same period
Strictly Financials
49
50. Dividend Yield
n
n
How much a company pays out in dividends
each year in relation to its stock price.
A way to measure how much cash flow you
are getting for each dollar invested in an
equity position. Investors who require a
minimum stream of cash flows from their
investments can secure this by investing in
stocks paying relatively high, stable dividend
yields.
Strictly Financials
50
52. Looking at Dividends
n
n
In general, investors react poorly to a
decrease in dividends, and the stock price
usually declines as investors seek other
dividend-paying stocks.
A stable dividend payout ratio indicates a
solid dividend policy by the company's board
of directors.
Strictly Financials
52
55. Assets
n
Property, plant and equipment, net
n
n
n
n
n
Land and improvement
Buildings and improvements
Equipment
Less accumulated depreciation
Goodwill and other intangibles
Strictly Financials
55
56. Goodwill and Impairment
n
Difference between what a business
pays to buy another company and the
book value (total assets minus total
liabilities) of that company
Strictly Financials
56
59. Statement of Cash Flows
n
Record of cash provided by cash
sources and of cash consumed by cash
uses.
Strictly Financials
59
60. Cash Flows (cont.)
n
n
n
n
n
Information about use of cash
Information about investing and
financing
Ability to continue as a going concern
Ability to generate future positive cash
flows
Ability to meet obligations and pay
dividends
Strictly Financials
60
62. Flexibility
n
n
n
Companies have some flexibility in
categories for entries.
Total change in cash, however, will not
change.
Overwhelming majority of all accounting
standards deal with balance sheet and
income statement, not cash flows
statement.
Strictly Financials
62
63. Free Cash Flow
n
n
n
n
Powerful tool for making a company
successful
Powerful indicator for investors
Cash that is left over after productive
capacity is maintained or expanded
Permits expansion, paying down debt,
buying back shares, etc.
Strictly Financials
63
64. Free Cash Flow (cont.)
n
n
n
Several ways to calculate it
Companies create their own models
Gross way to do it:
n
n
n
Cash from operating activities
Minus capital expenditures
Equals free cash flow
Strictly Financials
64
65. American Standard Model
n
n
n
n
n
Cash from operating activities
Minus capital expenditures
Plus proceeds from disposal of property
Plus proceeds from sale and
leasebacks
Equals free cash flow
Strictly Financials
65
66. Free Cash Models
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‘Gross’ method
American Standard method
VF method
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Cash from operating minus cash from
investing
Strictly Financials
66
67. Keys to Looking at Cash
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Cash from operations
Capital expenditures (cap ex)
Free cash
Cash and cash equivalents at the end
of the year
Strictly Financials
67
68. Looking at the Numbers
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Note changes in amounts year to year, especially
revenues and expenses
Note numbers that are significantly larger or smaller
than the previous period
Look at trend line for sales/revenues, operating
income and net income. Calculate percentage
change for each.
Look at cash flow
Look at free cash flow
Tie the numbers to the footnotes.
Strictly Financials
68