Free cash flow

1. State the Miller Modigliani (MM) dividend irrelevance proposition Modigliani and Miller (MM) proposed that in an ideally simple and perfect capital market, shareholders are indifferent between dividend and capital gains, and the value of a company is determined solely by the earning power of its assets and investments. Focuses more on firm value but not on firm risk. MM argued that if a company with investment opportunities decides to pay dividend, so that retained earnings are insufficient…

2. Statement of changes in Financial position It includes a Funds Flow Statement and a Cash Flow Statement. Funds flow statement shows the sources and applications of cash and cash equivalents during a period. Objectives of preparing a Financial Statements (i) To present a true and fair view of the financial performance (i.e. profit/ loss) of the business.…

the close of fiscal 2015 HRB carries a 0.28% debt-to equity percentage signifying they have the ability to balance debt and pay notes without stressing the balance sheet. The debt-to-equity ratio of 1.44 exhibits their ability to thwart short-term cash flow issues. The tax giant has consecutively produced positive earning per share (EPS) year over year. HRB garnered a 24.2% increase from 2012-2013. EPS from $1.28 to $1.59, an increase up to $1.67. The 2015 Yearly Report stated an adjusted EPS…

Accounts affected: cash, equity, Issued Share Capital (par value £1 per share), shares B. Cash increase, equity increase, Issued Share Capital (par value £1 per share) decrease by £3,000; shares increase by £7,000 C. Cash will increase by (3000 shares x £1) = £3,000, Issued Share Capital (par value £1 per share) decrease by £3,000; shares increase by £7,000 and equity…

Typically, it is easier to obtain lease financing than loans from commercial lenders. It makes cash flow management easier because we will have to pay regularly at the same rate. It is cheaper and easier than some other sources because we don't need to pay the entire amount upfront. Leasing is inflation friendly: as the costs go up over five or ten…

The management team must look at all the capital budgeting CUSTOM SNOWBOARDS 29 techniques to understand the total viability of the project. The decision will not be an easy one, but will require careful review of the entire financial picture. B5. Summary Custom Snowboards has demonstrated that European expansion is an idea that is viable for the company. The company must now decide if they wish to build, merge, or acquire within the European market. This will not be an easy decision, but…

Xtreme Second Run cinema ‘n’ café 1.1 Objectives • The company projects to make sales of about £600K minimum within the first year and by year 3, a minimum of a million. • It projects a work-forces costs less than £300K in the first year. • To break even by end of 3rd quarter of the year. 1.2 Mission Xtreme Second Run cinema ‘n’ café operation is to set up a new cinema experience for its customers that will be so thrilling and refreshing with the aim of making them return as much as possible and…

Inventory turnover measures the amount of times a company sells its average merchandise inventory during a year. We start with the cost of goods sold (the cost of merchandise inventory the business has sold to its customers) over the average merchandise inventory for the year. To find the average inventory, you would combine both 2013 and 2014 to find the 2014 average and combine 2012 to 2013 to find the average for 2013. Having a high turnover rate means the company is capable of selling…

2015 is 5.9% under the tab, Under Armour Income Statement in W2 in cell N14. When it comes to the free cash flows ratio it is 207,900 USD for 2013 under the tab, Under Armour Cash Flow in W2 in cell Q10. The free cash flows ratio for 2014 is 359,561 USD under the tab, Under Armour Cash Flow in W2 in cell P10. Finally, the free cash flows ratio for 2015 is 254,824 USD under the tab, Under Armour Cash Flow in W2 in cell…

Tips for Brick and Mortar Businesses By: Rachel Lions Tips for Brick and All Rights Reserved Cover photo by Andresk8, available under a Public Domain license Copyright © 2015 By: Rachel Lions All Rights Reserved. This book may not be reproduced, transmitted, or stored in whole or in part by any means, including graphic, electronic, or mechanical without the express written consent of the publisher except in the case of brief quotations embodied in critical articles and reviews. Booktango books…