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

2. 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.

3. 2-3 Financial Statements

4. 2-4 Balance Sheet: Assets

5. 2-5 Balance sheet: Liabilities and Equity

6. 2-6 Income statement

7. 2-7 Other data

8. 2-8 Statement of Retained Earnings

9. 2-9 Statement of Retained Earnings

10. 2-10 Statement of Cash Flows

11. 2-11 Statement of Cash Flows

12. 2-12 Statement of Cash Flows

13. 2-13 Statement of Cash Flows

14. 2-14 Statement of Cash Flows (2006)

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

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

17. 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

18. 2-18 Analysis of Profitability