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Corporate Finace

The document outlines financial calculations including balance sheets, income statements, dividends, retained earnings, operating cash flow, net capital spending, and changes in net working capital. It also covers cash flow to creditors and future value calculations using general formulas and examples. Additionally, it provides exercises related to present value and future value calculations.

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Mốc My
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9 views4 pages

Corporate Finace

The document outlines financial calculations including balance sheets, income statements, dividends, retained earnings, operating cash flow, net capital spending, and changes in net working capital. It also covers cash flow to creditors and future value calculations using general formulas and examples. Additionally, it provides exercises related to present value and future value calculations.

Uploaded by

Mốc My
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Building a balance sheets


Current assets $4,900
Net fixed assets $27,300
Current liabilities $4,100
Long-term debt $10,200
Shareholders equity (4,900 + 27,300) – ( 4,100 + 10,200) = 17,900
(total assets – total liabilities)
Net working capital 4,900 – 4,100 = 800
(current assets – current liabilities)
2. Bulding an income statement
Revenue $796,000

Costs of goods sold $327,000

Gross income 769,000 – 327,000 = 442,000

Depreciation expense $42,000

Interest expense $34,000

Total expense 42,000 + 34,000 = 76,000

Earning before tax 442,000 – 76,000 = 366,000

Taxes 21% x 366,000 = 76,860

Net income 366,000 – 76,860 = 289,140

3. Dividends and Retained Earnings


Dividends $95,000

Retained earnings 289,140 – 95,000 = 194,140

(net income – dividends)

4. Per-share Earnings and Dividends


Earnings Per-share 289,140 / 80,000 = 3.61435

Dividends Per-share 95,000 / 80,000 = 1.1875


5. Calculating Operating cash flow
Revenue $46,200

COGS $23,000

Gross income $23,200

Depreciation expense $2,200

EBIT $21,000

Interest expense $1,700

EBT $19,300

taxes $4,246

Net income $15,054

OCF 23,200 – 4,246 = 18,954

(EBIT + Depreciation – Taxes)

6. Calculating Net capital spending


Net fixed assets 2017 $2,4m

Net fixed assets 2018 $3,3m

Depreciation $319,000

Net capital spending 2,4m + 3,3m – 319,100 = 2,410,900

(ending net fixed + begining net fixed – depreciation)

7. Calculating additions to NWC (net working capital)


2017 balance sheet

Current assets $4,810

Current liabilities $2,230

NWC $2,580 (current assets – current liabilities)

2018 balance sheet

Current assets $5,360

Current liabilities $2,970

NWC $2,390

Change in NWC $2,390 – $2,390 = – 190


8. Cash flow to creditor
Long-term debt in 2017 $1,870,000

Long-term debt in 2018 $2,210,000

Net new borrowing 2,210,000 – 1,870,000 = 340,000

(kỳ này – kỳ trước)

Interest expense in 2018 $255,000

Cash flow to creditors 255,000 – 340,000 = – 85,000

9. Future value: General formula


FVt = PV(1 + r)t

- FVt = future value


- PV = present value
- r = discount rate
- t = number of periods

PV = FVt / (1 + r)t

10. Annuities

( 1+ r )t −1
FVAt = CF
r
Chapter 5

Ex.1:

r = 9%, t = 8, PV = 7,500

FVt = 7,500*(1 + 9%)^8 = 14,944

Ex.2:

FVt = 2,328*(1 + 13%)^11 = 8,929

FVt = 7,513*(1 + 9%)^7 = 13,734

FVt = 74,381*(1 + 12%)^14 = 363,508

FVt = 192,050*(1 + 6%)^16 = 487,874

Ex. 3:

PV = 16,832/(1 + 9%)^13 = 5,490

PV = 48,318/(1 + 7%)^4 = 36,861

PV = 886,073/(1 + 13%)^29 = 25,597

PV = 550,164/(1 + 21%)^40 = 268

Chapter 6:

Ex.1: tính PV của từng CF => tính PV tổng

r = 10%,

Ex.3:

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