公司理财期末整理(英文版)

一、***是什么意思？
1）Capital budgeting 资金预算
2）Capital Structure 资金结构
3）Net working capital
二、组织结构图谁负责谁？
三、The corporate firm
Forms of Business Organization
●Attributes:
●It is the cheapest business to form.
●It pay no corporate income taxes.
●The owner has unlimited liability.
●Its life is limited.
●It has difficulty in raising funds.
1)The sole proprietorship 独资企业特点P7
2)The Partnership 合伙企业（The business is owned by two or more persons.）Attributes:特征
@Initiation
@Liability
@ Life
@ Ability to raise funds
@Taxation
@Controlling
（1）General Partnership
@ All partners agree to provide fraction of the work and cash and to share the profit and loss.
@Each partner is liable for all of the debts .
（2）Limited Partnership
One or more partners are designated general partners and other partners are designated limited partners.
3）The Corporation: 公司
A corporation is owned by individuals who normally are not active in the day –to –day operation of that business.
It is by far the most important form of business.
Features:特征
1.Starting
@Starting a corporation is more complicated
@Preparing articles of incorporation and a set of by laws:
Name of corporation
Intended life
Business purpose
Number of shares of stock
Nature of the right granted to shareholders
Number of members of the initial board of directors
2. Three sets of distinct interests:
Shareholders
Directors
Corporation officer
3.It is a legal entity.
4.Ownership
Ownership is represented by shares of stock, it is easy to transfer ownership.
5.Life
6.The corporation has unlimited life
7.Liability
Liability is limited to the amounted invested in the ownership .
8.Taxation: double taxation
9.Raising funds: easy
The goal of financial management：
Maximize the current value per share of the existing stock.
1.5 Financial Markets
Classification of financial markets市场分类
1.Money market vs capital market
1) Money Market
The market for debt securities that will pay off in the short term
2) Capital Market
The market for long-term debt and for equity shares (common stock, preferred stock, corporate and government bonds
2.Primary Market vs Secondary Markets
1) Primary Market一级市场
Issuance of a security for the first time
2)Secondary Markets二级市场
Buying and selling of previously issued securities
anized security exchanges vs over-the counter market (
Securities may be traded in either a dealer or auction market
1) Organized security exchanges are tangible entities
NYSE
2）OCT include all security markets eccept the organized exchanges.
NASDAQ
2.3 Taxes
The one thing we can rely on with taxes is that they are always changing
Marginal vs. average tax rates
Marginal – the percentage paid on the next dollar earned
Average – the tax bill / taxable income
1) Average tax rate is tax bill divided your taxable income.
2) Marginal tax rate is the tax you would pay (in percent) if you earned one more dollar.
例题：
Taxable Income Tax Rate
$ 0 - 50,000 15%
50,001-75,000 25%
75,001-100,000 34%
100,001-335,000 39%
335,001-10,000,000 34%
--------------------------------
The tax rates apply to the part of income in the indicated range only, not all income.
Suppose your firm earns $4 million in taxable income. Use table2.1,we can figure out tax bill as:
.15($50,000)=$7,500
.25(75,00-50,000)=6250
.34(100,000-75,000)=8500
.39(335,000-100,000)=91,650
.34(4,000,000-335,000)=1246,100
Total tax bill 1,360,000
Average tax rate= 1,360,000/4,000,000 =34%
Equation
Cash flows from the assets= Operating cash flow –Investment in NWC –Investment in fixed assets
1.Operating cash flow
Definition: Operating cash flow refers to the cash generated from operations.
Calculation:
Method 1:
OCF= Sales – Costs – Taxes
Method 2:
OCF = EBIT + Depreciation – Taxes
Eg
Nabors, corporation.
2005 Income Statement ($ in millions)
Net sales $9,610
Less: Cost of goods sold 6,310
Less: Depreciation 1,370
Earnings before interest and taxes 1,930
Less: Interest paid 630
Taxable Income $1,300
Less: Taxes 455
Net income $ 845
Method1:
Sales $9,610
Less: cost 6,310
Taxes 455
Operating cash flow $ 2845
Nabors, corporation
2005 Income Statement ($ in millions)
Net sales $9,610
Less: Cost of goods sold 6,310
Less: Depreciation 1,370
Earnings before interest and taxes 1,930
Less: Interest paid 630
Taxable Income $1,300
Less: Taxes 455
Net income $ 845
Method2:
Earnings before interest and taxes $1,930
Plus depreciation 1,370
Less taxes 455
Operating cash flow $ 2845
Positive cash flows were generated from operations of $2845.
2.Change in NWC
Definition:
Net Working Capital =current assets – current liabilities
NWC usually grows with the firm
Change in NWC= ending net working capital – beginning net working capital
3.Change in fixed assets
Method 1:
Ending gross fixed assets- Beginning gross fixed assets = Change in fixed assets Method 2:
Ending net fixed assts - Beginning net fixed assets+ Depreciation
= Change in fixed assets .
Free cash flow
Common-Size Balance Sheets
Compute all accounts as a percent of total assets
(express each item as percentage of total assets
Common-Size Income Statements
Compute all line items as a percent of sales
(express each item as a percentage of total sales)
Categories of Financial Ratios
Short-term solvency or liquidity ratios
Long-term solvency, or financial leverage, ratios
Asset management or turnover ratios
Profitability ratios
Market value ratios
Computing Liquidity Ratios
Meaning
Liquidity ratios are intended to provide information about a firm’s liquidity.
Who are interested in liquidity ratios
short-term creditor
Features
Their book value and market value are likely to be similar.
Calculation
Current Ratio = CA / CL (dollar or times)
708 / 540 = 1.31 times
Quick Ratio (acid-test)= (CA – Inventory) / CL
(708 - 422) / 540 = .53 times
Cash Ratio = Cash / CL
98 / 540 = .18 times
3.3 The Du Pont Identity
It is an integrative approach to ratio analysis.
It evaluates firm’s return on equity (ROE)
Definition of ROE
ROE = Net income / Total equity
Multiply by 1(TA / TA) and then rearrange:
ROE = (NI / TE) (TA / TA)
ROE = (NI / TA) (TA / TE) = ROA * EM
Multiply by 1 again and then rearrange:
ROE = (NI / TA) (TA / TE) (Sales / Sales)
ROE = (NI / Sales) (Sales / TA) (TA / TE)
ROE = PM * TAT * EM
ROE = PM * TAT * EM
Profit margin is a measure of the firm’s operating efficiency – how well it controls costs.
Total asset turnover is a measure of the firm’s asset use efficiency – how well it manages its assets.
Equity multipli er is a measure of the firm’s financial leverage.
3.5 Long-Term Financial Planning
Another use of financial statements
The most comprehensive means of financial planning is to develop a series of pro forma, or projected, financial statements.
External Financing Needed (EFN)
The difference between the forecasted increase in assets and the forecasted increase in liabilities and equity.
Formula: EFN=Assets×g- Spontaneous liabilities×g-
PM×Projected sales×(1-d)
External Financing Needed (EFN) can also be calculated as:
The Internal Growth Rate
The internal growth rate tells us how much the firm can grow assets using retained earnings as the only source of financing.
The Sustainable Growth Rate
The sustainable growth rate tells us how much the firm can grow by using internally generated funds and issuing debt to maintain a constant debt ratio.
4.4 Simplifications
Perpetuity
A constant stream of cash flows that lasts forever
Growing perpetuity
A stream of cash flows that grows at a constant rate forever
Annuity
A stream of constant cash flows that lasts for a fixed number of periods
Growing annuity
A stream of cash flows that grows at a constant rate for a fixed number of periods
Zero Coupon Bonds
Make no periodic interest payments (coupon rate = 0%)
The entire yield to maturity comes from the difference between the purchase price and the par value
Cannot sell for more than par value
Sometimes called zeroes, deep discount bonds, or original issue discount bonds (OIDs) Treasury Bills and principal-only Treasury strips are good examples of zeroes
The Fisher Effect
The Fisher Effect defines the relationship between real rates, nominal rates, and inflation.
(1 + R) = (1 + r)(1 + h), where
R = nominal rate
r = real rate
h = expected inflation rate
Approximation
R = r + h
例子
If we require a 10% real return and we expect inflation to be 8%, what is the nominal rate? R = (1.1)(1.08) – 1 = .188 = 18.8%
Approximation: R = 10% + 8% = 18%
Because the real return and expected inflation are relatively high, there is a significant difference between the actual Fisher Effect and the approximation.。