Finnace 303 Notes

THURSDAY – WEEK 1

Chapter 1 & 2

* Stock Bonuses can a line the intrests of the managers with the shareholders

* Starboard and their 2012 takeover of the Olive Garden Board

* Job security

Chapter 1 – Book Review - Pg.27

#2) Subtract cost from sales

$ 760,000 – $300,000 = 460,000

Cash Collected: 690,000

Net Cash Flow:

You use the cash you received which is 690,000 subtracted by cost 300,000

Cash Flow = F

Time = t

Summation = E

Chapter 2 - Book Review - Pg.53

Pre-txt earning ------ 490,000

Interests Income ----20,000

Diveden Income ---- 20,000 --- 70% exclusions

Tax on operating earnings:

490,000 x 0.40 = 190,000

Tax on intrest income:

20,000 x 0.4 = 8,000

Aford Tax interest income:

20,000 – 8,000 = 10,000

Chapter 2 - Book Review - Pg.53

#2.2) Tax per Earning $10millinon

TUESDAY – WEEK 2

Chapter 3 Finnacial Statements and Ratio Analysis Companies Performance

Objectives

* Know the stockholders report

* Know how to compute and interpret important financial ratios

* Use summary of financial ratios and the DuPont system of analysis to perform a complete ratio anaylsis

* We like to do a comparisons in the same market

* Historic Data Trends (Time Series) – How the company has been doing over time, overall is the company doing good or bad?

* Cross-Sectional Peer Firms

The Stockholders Report

An Anuual Report that public owned corporation must provide to shareolders, that summarizes and documents financial activities in the past year.

* Letter to Stockholders

* Four Key Financial Statements

1. Income Statement = QuarterorYear How the company runs their operations (Sales,Costs,Expenses) Goal is to make a profit. You take our revenues from xxpenses to gain profit. The Income Statement summarizes a firm’s revenues and expenses over a given period of time.

2. Balance Sheet = Balancing Liabilities. The balance sheet is a snapshot of the firm’s...