2-1 CHAPTER 7 Financial Statements and CF Balance sheet Income statement Statement of cash flows Free Cash Flow Performance Analysis

2-2 The Annual Report Balance sheet – provides a snapshot of a firm’s financial position at one point in time. Income statement – summarizes a firm’s revenues and expenses over a given period of time. Statement of cash flows – reports the impact of a firm’s activities on cash flows over a given period of time.

2-3 Financial Statements

2-4 Balance Sheet: Assets

2-5 Balance sheet: Liabilities and Equity

2-6 Income statement

2-7 Other data

2-8 Statement of Retained Earnings

2-9 Statement of Retained Earnings

2-10 Statement of Cash Flows

2-11 Statement of Cash Flows

2-12 Statement of Cash Flows

2-13 Statement of Cash Flows

2-14 Statement of Cash Flows (2006)

2-15 STEPS TO CALCULATE FREE (FINANCIAL) CASH FLOWS OF A FIRM

2-16 STEPS TO CALCULATE FREE (FINANCIAL) CASH FLOWS OF A FIRM

2-17 Analysis of Profitability Return on Invested Capital (ROIC) NOPAT / Total Operating Capital Economic Value Added (EVA) NOPAT – (WACC * Tot Oper. Capital) Market Value Added (MVA) Market Value of equity – Book Value of equity

2-18 Analysis of Profitability