文档介绍：Chapter 3: Interpreting Financial Statements
Objective
Contrast Economic and
Accounting Models
Value of Accounting
Information
Chapter 3 Contents
Review of Financial Statements
Market Values v. Book Values
Accounting v. Economic Measures of e
Return on Shareholders v. Return on Equity
Analysis Using Financial Ratios
The Relation Among Ratios
Limitations of Ratio Analysis
Purpose and Process of Financial Planning
Managing Working Capital
Review of Financial Statements
Financial Statements
Provide information (clues) to the owners & creditors of a firm about the current status and past performance.
Provide a convenient way for owners & creditors to set performance targets & to impose restrictions on the managers of the firm.
Provide a convenient templates for financial planning.
The Balance Sheet
Summarizing a firm’s assets (what it owns), liabilities (what it owes), worth (owners’ equity) at a moment in time.
Amounts measured at historical values (acquisition cost) and historical exchange rates.
Prepared according to GAAP (Generally Accepted Accounting Principles).
Exchange-panies ply with SEC (Securities and mission) rules.
Major Divisions
Assets
Current assets (less than a year)
Long-term assets (longer than a year)
Depreciation
Liabilities and Stockholder’s Equity
Liabilities
Current Liabilities
Net Working Capital = Current Assets - Liabilities
Long-term debt
Equity
The Balance Sheet
GPC Balance Sheet at Dec 31, 2xx1
2xx1
2xx0
Market Price
Per Share
2xx0
Change
Assets
Cash & mkt'ble secs
Receivables
Inventories
*Current assets
Pp&e
Acc depreciation
()
()
()
*Net pp&e
**Total Assets
Liabilities & Equity
Accounts payable
Short-term debt
*Current liabilities
Long-term debt
-
**Total liabilitie