Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
OCF (definition)
|
Operating Cash flow
|
|
|
OCF (formula)
|
OCF = Earnings before tax (EBIT) + depreciation - taxes
|
|
|
Net CAPEX (definition)
|
Net capital spending
|
|
|
Net CAPEX (formula)
|
Net CAPEX = Ending net fixed assets - beginning net fixed assets + depreciation
|
|
|
NWC (definition)
|
Change in net working capital
|
|
|
NWC (formula)
|
Change in NWC = Ending NWC - Beginning NWC, where NWC = (CA - CL) (current assets - current liabilities)
|
|
|
Cash flow from assets (formula)
|
Cash flow from assets = OCF - Net CAPEX - Change in NWC
|
|
|
Cash flow to creditors (debt) (formula)
|
Cash flow to creditors (debt) = interest paid - Net new borrowing (end LTD (including deferred taxes) - begin LTD (including deferred taxes))
|
|
|
Cash flow to stockholders (equity) (formula)
|
Dividends paid - Net new equity raised (end equity - begin equity)
|
|
|
Cash flow from assets (formula)
|
Cash flow to creditors (debt) + cash flow to Stockholders (equity)
|
|
|
Net change in cash over period (formula)
|
Net change in cash over period = Net Income + depreciation ± change in current liabilities ± change in current assets (excluding cash) - Net CAPEX + change in LTD (including change in deferred taxes) - Dividends paid + new equity raised
|
|
|
Statement of Cash Flows (order & signs)
|
Net Income
Depreciation (add) Change in CL (add) Change in CA, excl. cash (subtract) Net CAPEX (subtract) Change in LTD, incl. deferred tax (add) Dividends Paid (subtract) New Equity (add) |
|
|
Sole Proprietorship (attributes)
|
All taxes paid at the personal level (IRS doesn't care where the money came from)
|
|
|
Partnership (attributes)
|
Partners have some % of the ownership and they get paid out based on their % of ownership
Partners pay taxes the same way a sole proprietor does |
|
|
Corporation (attributes)
|
Corporation is its "own person"
Double Taxation: - Corporation pays taxes - Shareholders pay taxes on the payments (dividends) they receive |
|
|
LLC (attributes)
|
Best of both worlds - no double taxation, protection from risk
|
|
|
What are the agency problems?
|
Cannot get your employees to care about the company's money as if it is their own (unless they're actually the owner - sole proprietorship)
|
