Professor Dr. Rainer Stachuletz

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Financial Statements And Cash Flow Analysis

• Professor Dr. Rainer Stachuletz
• Corporate Finance

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Four Key Financial Statements
Balancesheet
Income statement
Retainedearnings
Cash flowStatemt.

• Financial Managers and analysts
• use financial statements to conduct
• Cash Flow Analysis
• Performance (Ratio) Analysis

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Accounting Profit vs. Cash Flow
Accounting Profit based on accrual
accountingfocus on past periods
Finance emphasizes the importance of timing You
cant deposit net income, only cash
Timing of cash flow matters. Accrual accounting
may obscure timing.
What are key measures of cash flow?
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Sources and Uses of Corporate Cash
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Key Measures of Cash Flow
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Types Of Financial Ratios
Current ratio Quick ratio
Inventory turnover ratio Average collection period
Debt-to-equity ratio Times interest earned ratio
Gross margin EPS
P/E ratio Market-to-book ratio
Liquidity Ratios
Activity Ratios
Debt Ratios
Profitability Ratios
Market Ratios
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Financial Ratios Trends and Benchmarking
Benchmarking comparison of a companys ratio
values to industry competitors ratios
Firms financial ratios compared at the same
point in time
Trend analysis - performance evaluation over time
Developing trends can be seen using multi-year
comparisons.
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Liquidity Ratios
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Activity Ratios
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Activity Ratios (Continued)
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Debt Ratios
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Debt Ratios (Continued)
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Profitability Ratios
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Profitability Ratios (Continued)
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Profitability Ratios (Continued)
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Market Ratios
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Market Ratios
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Financial Statements andCash Flow Analysis
Case Staples Ltd.
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Staples Balance Sheet( Thousands)
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Staples Liabilities Stockholders Equity (
Thousands)
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Staples Income Statement ( Thousands)
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Staples Statement Of Retained Earnings (
Thousands)
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Staples Statement Of Cash Flows ( Thousands)
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Staples Statement Of Cash Flows (Thousands)