Some titles have flashcards, definition look-up, and text-to-speech too. Your Device, Your Way Access online textbooks from your laptop, tablet, or mobile phone. Mac vs PC? You're covered. Once they are sent to your email, there is no refund will be offered Cant find the book you want? A typical industrial company's balance sheet lists the firm's assets that will be converted to cash first, and then goes on down to list the firm's longest lived assets last.
The balance sheet for a given year, say , is designed to give us an idea of what happened to the firm during that year. The balance sheet for a given year, say , tells us how much money the company earned during that year.
The difference between the total assets reported on the balance sheet and the debts reported on this statement tells us the current market value of the stockholders' equity, assuming the statements are prepared in accordance with generally accepted accounting principles GAAP.
For most companies, the market value of the stock equals the book value of the stock as reported on the balance sheet. Other things held constant, which of the following actions would increase the amount of cash on a company's balance sheet?
The company purchases a new piece of equipment. The company repurchases common stock. The company pays a dividend. The company issues new common stock. The company gives customers more time to pay their bills. Which of the following items is NOT included in current assets? Short-term, highly liquid, marketable securities.
Which of the following items cannot be found on a firm's balance sheet under current liabilities? Accrued payroll taxes. Short-term notes payable to the bank. Accrued wages. Cost of goods sold. The income statement for a given year, say , is designed to give us an idea of how much the firm earned during that year. The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks.
The reported income of two otherwise identical firms cannot be manipulated by different accounting procedures provided the firms follow Generally Accepted Accounting Principles GAAP. The reported income of two otherwise identical firms must be identical if the firms are publicly owned, provided they follow procedures that are permitted by the Securities and Exchange Commission SEC.
Below are the year-end balance sheets for Wolken Enterprises:. Total current assets. Liabilities and equity:. Notes payable. Total current liabilities. Long-term debt. Total common equity. Total liabilities and equity. As of the end of , none of the principal on this debt had been repaid. Carousel Previous. Carousel Next. What is Scribd? Uploaded by Rab Rakha. Did you find this document useful? Is this content inappropriate?
Report this Document. Flag for inappropriate content. Download now. For Later. Related titles. Carousel Previous Carousel Next. Brigham and Michael C. Jump to Page. Search inside document. Syed Mohib Hassan. Brian Anderson. Oronno Afridi. Lee Wong. Ranin, Manilac Melissa S. Thiviah Sanasee. Wu Tian Wen. Timeka Carter. Christian Mozo Oliva. Le Trung. Lan Phuong Pham. Angelene Buenafe. More From Rab Rakha. Rab Rakha. With this background, we go on to discuss how specific techniques and decision rules can be used to help maximize the value of the firm.
This organization provides four important advantages:. Managers should try to maximize the intrinsic value of a firm, which is determined by cash flows as revealed in financial statements. Our early coverage of financial statements helps students see how particular financial decisions affect the various parts of the firm and the resulting cash flow. Also, financial statement analysis provides an excellent vehicle for illustrating the usefulness of spreadsheets.
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