Chapter 9 Cash and Marketable Securities Management 现金和有价证券管理 财务管理(双语版) 教学课件
级市场)
➢ Yield 收益性 利息、本金的增值
➢ Maturity 到期日 证券的寿命期间 一般到期日越长，收益 率也就越高，但收益承担的风险也越大
ቤተ መጻሕፍቲ ባይዱ
3.Selecting Securities for the Portfolio Segments 有价 证券组合各部分的证券选择
➢ Ready cash 备用现金 主要考虑安全性（safety）、变现性
（marketability-流动性），可选国库券（treasury bills、政府 短期债券）等。
➢ Controllable segment 可控现金部分，用于支付工资、应付
账款、税款和股利等，其转化为现金的时间已知，但是需要考虑 安全性、流动性。可选择与已知现金需求到期日一致的债券、定 期存单、商业票据等，但比备用现金更多考虑收益性（yield）。
Chapter 9 Cash and Marketable Securities Management 现金和有价证券管理
二、Marketable Securities 有价证券 现金 有价证券
1.可以分为三个组成部分： ➢ 备用现金部分 Ready cash segment,R$防止企业的现金
账户可能出现的不足而持有的最优有价证券
➢ 可控现金部分Controllable cash segment,C$应付可控 (已知)现金流出,如税收、股利而持有的有价证券
➢ 自由现金部分Free cash segment，F$自由的有价证券 (即还没有明确指定用途)
2.Variables in Marketable Securities Selection ➢ Safety 安全性 收回初始投资金额的可能性
➢ Free cash segment 自由现金部分 收益性最重要，但要注意
权衡风险和收益 。比如，投资于长期、违约风险较高、流动性较 低的证券，可获得的收益也较高，但是风险较大。
流动比率固定比率固定长期适合率
Total assets
1,330,000
1,323,149
100
1,290,000
80 68.6
Debt-to-total capital ratio (right scale)
1,250,000
60
Shareholders' equity ratio (right scale)
80 88.2 0 31.8
0102 2ຫໍສະໝຸດ 01 200203 2003
04 2004
05 2005
Current ratio Quick ratio Fixed ratio Fixed assets capitalization
Total assets, Debt-to-total capital ratio, Shareholders’ equity ratio
Stability
Current ratio, Fixed ratio, Fixed assets capitalization
Current ratio
400 312.4
320
Quick Ratio
240
Fixed ratio
160 116.2
Fixed assets capitalization
1,210,000 40
17.2 0
20
0
01
02
03
04
05
Millions of yen Thousands of U.S. dollars
2001 Short-term debt Long-term debt, less current maturities Interest-bearing debt Total Shareholders’ equity Total assets Debt-to-total capital ratio (%) Debt to total assets (%) Shareholders’ equity ratio (%) Debt-to-equity ratio (Times)
新编金融英语教程 Chapter6 Financial Markets
Overview of the Financial Markets
CONTENTS
6.1 L e a d - i n 6.2 K e y Po i n t s 6.3 L a n g u a g e N o t e s 6.4 F o l l o w - u p Ta s k s 6.5 E x t e n d e d Ta s k s
6.3 Language Notes
III. Sentences
1. Financial markets are typically defined by having transparent pricing, basic regulations on trading, costs and fees, and market forces determining the prices of securities that trade.
2. Financial markets can be classified as debt or equity markets, as primary or secondary markets, as exchanges and Over-the-Counter markets, as money or capital markets, or as spot or futures and forward markets.
discuss the various functions of the financial market.
6.2 Key Points
6.2.1 Definition of Financial Markets
￥$
Financial Markets
公司理财英文版第十九章二十章
Reasons for Holding Cash
• Speculative motive – hold cash to take advantage of unexpected opportunities
• Precautionary motive – hold cash in case of emergencies
• Transaction motive – hold cash to pay the day-to-day bills
• Trade-off between opportunity cost of holding cash relative to the transaction cost of converting marketable securities to cash for transactions
– Generated when a firm writes checks – Available balance at bank – book balance > 0
• Collection float
– Checks received increase book balance before the bank credits the account
2
The opportunity cost
12
of holding –C is –C ×
Opportunity Costs The investment income foregone when holding cash.
Trading costs
C*
Size of cash balance
19A-7
The BAT Model
Chapter 12 Cash and Marketable Securities
Classification of marketable 12-13 securities
Credit securities indicate the credit that is owned by the investors, namely, the claim to the principal and interest on maturity date.
12-3
What is Cash?
Coins Currency Money orders received from customers Checks Money deposited in banks
12-4
Compensating balance
In order to ensure a company’s credit-granting arrangement, a company is forced to keep a minimum amount in the bank account. The minimum is called compensating balance.
in customers
in
lenders
in investors
salaries out
out suppliers
out creditors
12-8
Positive and negative cash flow
A positive cash flow Inflow of cash > outflow of cash
12-1
CHAPTER 12
Cash and Marketable Securities
12-2
Learning objectives
风险、报酬与证券市场线
1
0
Den Bel Can Swi Spa UK Ire Neth USA Swe Aus Ger Fra Jap
It
2021/4/4
Corporate Finance
Country
14 Copyright © 2005 by zqf
理解贝塔系数
iM
iM
2
M
特定股票的贝塔1.5，表明该股票拥有市场1.5倍 的系统性风险（如利率上调市场平均损失10% ，而该股票损失15%）。
s2t.oMcka’rskeret triuskrnisto the
rmeetausrunreodnbtyhbeetma,arket
Expected stock
pthoerstefonlsiioti.vity to
market changes
return
+-10%
iM
iM 2
M
beta
- 10%
特定股票的贝塔0.5，表明该股票拥有市场一半 的系统性风险。
2021/4/4
Corporate Finance
15 Copyright © 2005 by zqf
1. Total risk =
市场组合与贝塔
diversifiable risk +
Байду номын сангаас
Bmeatrake-t Sriesknsitivity of a
R深= 1.8%+ 1.1* (12%- 1.8%)=13.02%
2021/4/4
Corporate Finance
18 Copyright © 2005 by zqf
本章概要与总结
1、风险分为系统性风险和非系统性风险。 3、非系统性风险通过多样化投资分散掉。 4、系统性风险用贝塔系数衡量。市场组合
chapter 9Cash and Marketable Securities Management(财务管理,Gregory A. Kuhlemeyer)
If cash balance reaches L, management intervenes by injecting C* dollars to return the cash balance to the target level C*.
9-15
Miller-Orr Model
Cash U*
9-11
Target Cash Balance
Carrying costs increase with the level of investment in current assets, and include the costs of maintaining economic value and opportunity costs. Shortage costs decrease with increases in the level of investment in current assets, and include trading costs and the costs related to being short of the current asset. For example, sales lost as a result of a shortage of finished goods inventory.
9-16
Miller-Orr Model
L set by thefirm
2 3 C L F R 4 U 3 C - 2 L 1 3
Avg.cash balance 4 C - L /3
9-17
Example
Assume L = $0, F = $10, i = 0.5% per month and the standard deviation of monthly cash flows is $2 000.
罗斯-公司理财-英文练习题-附带答案-第九章
CHAPTER 9Risk Analysis, Real Options, and Capital Budgeting Multiple Choice Questions:I. DEFINITIONSSCENARIO ANALYSISb 1. An analysis of what happens to the estimate of the net present value when you examinea number of different likely situations is called _____ analysis.a. forecastingb. scenarioc. sensitivityd. simulatione. break-evenDifficulty level: EasySENSITIVITY ANALYSISc 2. An analysis of what happens to the estimate of net present value when only onevariable is changed is called _____ analysis.a. forecastingb. scenarioc. sensitivityd. simulatione. break-evenDifficulty level: EasySIMULATION ANALYSISd 3. An analysis which combines scenario analysis with sensitivity analysis is called _____analysis.a. forecastingb. scenarioc. sensitivityd. simulatione. break-evenDifficulty level: EasyBREAK-EVEN ANALYSISe 4. An analysis of the relationship between the sales volume and various measures ofprofitability is called _____ analysis.a. forecastingb. scenarioc. sensitivityd. simulatione. break-evenDifficulty level: EasyVARIABLE COSTSa 5. Variable costs:a. change in direct relationship to the quantity of output produced.b. are constant in the short-run regardless of the quantity of output produced.c. reflect the change in a variable when one more unit of output is produced.d. are subtracted from fixed costs to compute the contribution margin.e. form the basis that is used to determine the degree of operating leverage employed by afirm.Difficulty level: EasyFIXED COSTSb 6. Fixed costs:a. change as the quantity of output produced changes.b. are constant over the short-run regardless of the quantity of output produced.c. reflect the change in a variable when one more unit of output is produced.d. are subtracted from sales to compute the contribution margin.e. can be ignored in scenario analysis since they are constant over the life of a project.Difficulty level: EasyACCOUNTING BREAK-EVENc 7. The sales level that results in a project’s net income exactly equaling zero is called the_____ break-even.a. operationalb. leveragedc. accountingd. cashe. present valueDifficulty level: EasyPRESENT VALUE BREAK-EVENe 8. The sales level that results in a project’s net present value exactly equaling zero iscalled the _____ break-even.a. operationalb. leveragedc. accountingd. cashe. present valueDifficulty level: EasyII. CONCEPTSSCENARIO ANALYSISb 9. Conducting scenario analysis helps managers see the:a. impact of an individual variable on the outcome of a project.b. potential range of outcomes from a proposed project.c. changes in long-term debt over the course of a proposed project.d. possible range of market prices for their stock over the life of a project.e. allocation distribution of funds for capital projects under conditions of hard rationing.Difficulty level: EasySENSITIVITY ANALYSISb 10. Sensitivity analysis helps you determine the:a. range of possible outcomes given possible ranges for every variable.b. degree to which the net present value reacts to changes in a single variable.c. net present value given the best and the worst possible situations.d. degree to which a project is reliant upon the fixed costs.e. level of variable costs in relation to the fixed costs of a project.Difficulty level: EasySENSITIVITY ANALYSISc 11. As the degree of sensitivity of a project to a single variable rises, the:a. lower the forecasting risk of the project.b. smaller the range of possible outcomes given a pre-defined range of values for theinput.c. more attention management should place on accurately forecasting the future value ofthat variable.d. lower the maximum potential value of the project.e. lower the maximum potential loss of the project.Difficulty level: MediumSENSITIVITY ANALYSISc 12. Sensitivity analysis is conducted by:a. holding all variables at their base level and changing the required rate of returnassigned to a project.b. changing the value of two variables to determine their interdependency.c. changing the value of a single variable and computing the resulting change in thecurrent value of a project.d. assigning either the best or the worst possible value to each variable and comparing theresults to those achieved by the base case.e. managers after a project has been implemented to determine how each variable relatesto the level of output realized.Difficulty level: MediumSENSITIVITY ANALYSISd 13. To ascertain whether the accuracy of the variable cost estimate for a project will havemuch effect on the final outcome of the project, you should probably conduct _____analysis.a. leverageb. scenarioc. break-evend. sensitivitye. cash flowDifficulty level: EasySIMULATIONd 14. Simulation analysis is based on assigning a _____ and analyzing the results.a. narrow range of values to a single variableb. narrow range of values to multiple variables simultaneouslyc. wide range of values to a single variabled. wide range of values to multiple variables simultaneouslye. single value to each of the variablesDifficulty level: MediumSIMULATIONe 15. The type of analysis that is most dependent upon the use of a computer is _____analysis.a. scenariob. break-evenc. sensitivityd. degree of operating leveragee. simulationDifficulty level: EasyVARIABLE COSTSd 16. Which one of the following is most likely a variable cost?a. office rentb. property taxesc. property insuranced. direct labor costse. management salariesDifficulty level: EasyVARIABLE COSTSa 17. Which of the following statements concerning variable costs is (are) correct?I. Variable costs minus fixed costs equal marginal costs.II. Variable costs are equal to zero when production is equal to zero.III. An increase in variable costs increases the operating cash flow.a. II onlyb. III onlyc. I and III onlyd. II and III onlye. I and II onlyDifficulty level: MediumVARIABLE COSTSa 18. All else constant, as the variable cost per unit increases, the:a. contribution margin decreases.b. sensitivity to fixed costs decreases.c. degree of operating leverage decreases.d. operating cash flow increases.e. net profit increases.Difficulty level: MediumFIXED COSTSc 19. Fixed costs:I. are variable over long periods of time.II. must be paid even if production is halted.III. are generally affected by the amount of fixed assets owned by a firm.IV. per unit remain constant over a given range of production output.a. I and III onlyb. II and IV onlyc. I, II, and III onlyd. I, II, and IV onlye. I, II, III, and IVDifficulty level: MediumCONTRIBUTION MARGINc 20. The contribution margin must increase as:a. both the sales price and variable cost per unit increase.b. the fixed cost per unit declines.c. the gap between the sales price and the variable cost per unit widens.d. sales price per unit declines.e. the sales price minus the fixed cost per unit increases.Difficulty level: MediumACCOUNTING BREAK-EVENa 21. Which of the following statements are correct concerning the accounting break-evenpoint?I. The net income is equal to zero at the accounting break-even point.II. The net present value is equal to zero at the accounting break-even point.III. The quantity sold at the accounting break-even point is equal to the total fixed costs plus depreciation divided by the contribution margin.IV. The quantity sold at the accounting break-even point is equal to the total fixed costs divided by the contribution margin.a. I and III onlyb. I and IV onlyc. II and III onlyd. II and IV onlye. I, II, and IV onlyDifficulty level: MediumACCOUNTING BREAK-EVENb 22. All else constant, the accounting break-even level of sales will decrease when the:a. fixed costs increase.b. depreciation expense decreases.c. contribution margin decreases.d. variable costs per unit increase.e. selling price per unit decreases.Difficulty level: MediumPRESENT VALUE BREAK-EVENd 23. The point where a project produces a rate of return equal to the required return isknown as the:a. point of zero operating leverage.b. internal break-even point.c. accounting break-even point.d. present value break-even point.e. internal break-even point.Difficulty level: EasyPRESENT VALUE BREAK-EVENb 24. Which of the following statements are correct concerning the present value break-evenpoint of a project?I. The present value of the cash inflows equals the amount of the initial investment.II. The payback period of the project is equal to the life of the project.III. The operating cash flow is at a level that produces a net present value of zero.IV. The project never pays back on a discounted basis.a. I and II onlyb. I and III onlyc. II and IV onlyd. III and IV onlye. I, III, and IV onlyDifficulty level: MediumINVESTMENT TIMING DECISIONb 25. The investment timing decision relates to:a. how long the cash flows last once a project is implemented.b. the decision as to when a project should be started.c. how frequently the cash flows of a project occur.d. how frequently the interest on the debt incurred to finance a project is compounded.e. the decision to either finance a project over time or pay out the initial cost in cash.Difficulty level: MediumOPTION TO WAITe 26. The timing option that gives the option to wait:I. may be of minimal value if the project relates to a rapidly changing technology.II. is partially dependent upon the discount rate applied to the project being evaluated.III. is defined as the situation where operations are shut down for a period of time.IV. has a value equal to the net present value of the project if it is started today versus the net present value if it is started at some later date.a. I and III onlyb. II and IV onlyc. I and II onlyd. II, III, and IV onlye. I, II, and IV onlyDifficulty level: ChallengeOPTION TO EXPANDb 27. Last month you introduced a new product to the market. Consumer demand has beenoverwhelming and appears that strong demand will exist over the long-term. Given thissituation, management should consider the option to:a. suspend.b. expand.c. abandon.d. contract.e. withdraw.Difficulty level: EasyOPTION TO EXPANDc 28. Including the option to expand in your project analysis will tend to:a. extend the duration of a project but not affect the project’s net present value.b. increase the cash flows of a project but decrease the project’s net present value.c. increase the net present value of a project.d. decrease the net present value of a project.e. have no effect on either a project’s cash flows or its net present value.Difficulty level: MediumSENSITIVITY AND SENARIO ANALYSISd 29. Theoretically, the NPV is the most appropriate method to determine the acceptabilityof a project. A false sense of security can be overwhelm the decision-maker when theprocedure is applied properly and the positive NPV results are accepted blindly.Sensitivity and scenario analysis aid in the process bya. changing the underlying assumptions on which the decision is based.b. highlights the areas where more and better data are needed.c. providing a picture of how an event can affect the calculations.d. All of the above.e. None of the above.Difficulty level: MediumDECSION TREEa 30. In order to make a decision with a decision treea. one starts farthest out in time to make the first decision.b. one must begin at time 0.c. any path can be taken to get to the end.d. any path can be taken to get back to the beginning.e. None of the above.Difficulty level: MediumDECISION TREEc 31. In a decision tree, the NPV to make the yes/no decision is dependent ona. only the cash flows from successful path.b. on the path where the probabilities add up to one.c. all cash flows and probabilities.d. only the cash flows and probabilities of the successful path.e. None of the above.Difficulty level: MediumDECISION TREEe 32. In a decision tree, caution should be used in analysis becausea. early stage decisions are probably riskier and should not likely use the same discountrate.b. if a negative NPV is actually occurring, management should opt out of the project andminimize their loss.c. decision trees are only used for planning, not actually daily management.d. Both A and C.e. Both A and B.Difficulty level: MediumSENSITIVITY ANALYSISd 33. Sensitivity analysis evaluates the NPV with respect toa. changes in the underlying assumptions.b. one variable changing while holding the others constant.c. different economic conditions.d. All of the above.e. None of the above.Difficulty level: MediumSENSITIVITY ANALYSISd 34. Sensitivity analysis provides information ona. whether the NPV should be trusted, it may provide a false sense of security if allNPVs are positive.b. the need for additional information as it tests each variable in isolation.c. the degree of difficulty in changing multiple variables together.d. Both A and B.e. Both A and C.Difficulty level: MediumFIXED COSTSb 35. Fixed production costs area. directly related to labor costs.b. measured as cost per unit of time.c. measured as cost per unit of output.d. dependent on the amount of goods or services produced.e. None of the above.Difficulty level: MediumVARIABLE COSTSd 36. Variable costsa. change as the quantity of output changes.b. are zero when production is zero.c. are exemplified by direct labor and raw materials.d. All of the above.e. None of the above.Difficulty level: EasySENSITIVITY ANALYSISb 37. An investigation of the degree to which NPV depends on assumptions made about anysingular critical variable is called a(n)a. operating analysis.b. sensitivity analysis.c. marginal benefit analysis.d. decision tree analysis.e. None of the above.Difficulty level: EasySENSITIVITY AND SCENARIOS ANALYSISb 38. Scenario analysis is different than sensitivity analysisa. as no economic forecasts are changed.b. as several variables are changed together.c. because scenario analysis deals with actual data versus sensitivity analysis which dealswith a forecast.d. because it is short and simple.e. because it is 'by the seat of the pants' technique.Difficulty level: MediumEQUIVALENT ANNUAL COSTc 39. In the present-value break-even the EAC is used toa. determine the opportunity cost of investment.b. allocate depreciation over the life of the project.c. allocate the initial investment at its opportunity cost over the life of the project.d. determine the contribution margin to fixed costs.e. None of the above.Difficulty level: MediumBREAK-EVENb 40. The present value break-even point is superior to the accounting break-even pointbecausea. present value break-even is more complicated to calculate.b. present value break-even covers the economic opportunity costs of the investment.c. present value break-even is the same as sensitivity analysis.d. present value break-even covers the fixed costs of production, which the accountingbreak-even does not.e. present value break-even covers the variable costs of production, which the accountingbreak-even does not.Difficulty level: EasyABANDONMENTd 41. The potential decision to abandon a project has option value becausea. abandonment can occur at any future point in time.b. a project may be worth more dead than alive.c. management is not locked into a negative outcome.d. All of the above.e. None of the above.Difficulty level: EasyTYPES OF BREAK-EVEN ANALYSISd 42. Which of the following are types of break-even analysis?a. present value break-evenb. accounting profit break-evenc. market value break-evend. Both A and B.e. Both A and C.Difficulty level: EasyMONTE CARLO SIMULATIONc 43. The approach that further attempts to model real word uncertainty by analyzingprojects the way one might analyze gambling strategies is calleda. gamblers approach.b. blackjack approach.c. Monte Carlo simulation.d. scenario analysis.e. sensitivity analysis.Difficulty level: MediumMONTE CARLO SIMULATIONc 44. Monte Carlo simulation isa. the most widely used by executives.b. a very simple formula.c. provides a more complete analysis that sensitivity or scenario.d. the oldest capital budgeting technique.e. None of the above.Difficulty level: EasyOPTIONS IN CAPITAL BUDGETINGd 45. Which of the following are hidden options in capital budgeting?a. option to expand.b. timing option.c. option to abandon.d. All of the above.e. None of the above.Difficulty level: EasyIII. PROBLEMSUse this information to answer questions 46 through 50.The Adept Co. is analyzing a proposed project. The company expects to sell 2,500units, give or take 10 percent. The expected variable cost per unit is $8 and the expected fixed costs are $12,500. Cost estimates are considered accurate within a plus or minus 5 percent range. The depreciation expense is $4,000. The sale price is estimated at $16 aunit, give or take 2 percent. The company bases their sensitivity analysis on the expected case scenario.SCENARIO ANALYSISd 46. What is the sales revenue under the optimistic case scenario?a. $40,000b. $43,120c. $44,000d. $44,880e. $48,400Difficulty level: MediumSCENARIO ANALYSISd 47. What is the contribution margin under the expected case scenario?a. $2.67b. $3.00c. $7.92d. $8.00e. $8.72Difficulty level: MediumSCENARIO ANALYSISc 48. What is the amount of the fixed cost per unit under the pessimistic case scenario?a. $4.55b. $5.00c. $5.83d. $6.02e. $6.55Difficulty level: MediumSENSITIVITY ANALYSISb 49. The company is conducting a sensitivity analysis on the sales price using a salesprice estimate of $17. Using this value, the earnings before interest and taxes will be:a. $4,000b. $6,000c. $8,500d. $10,000e. $18,500Difficulty level: MediumSENSITIVITY ANALYSISb 50. The company conducts a sensitivity analysis using a variable cost of $9. The totalvariable cost estimate will be:a. $21,375b. $22,500c. $23,625d. $24,125e. $24,750Difficulty level: MediumUse this information to answer questions 51 through 55.The Can-Do Co. is analyzing a proposed project. The company expects to sell 12,000units, give or take 4 percent. The expected variable cost per unit is $7 and the expectedfixed cost is $36,000. The fixed and variable cost estimates are considered accuratewithin a plus or minus 6 percent range. The depreciation expense is $30,000. The tax rate is 34 percent. The sale price is estimated at $14 a unit, give or take 5 percent. Thecompany bases their sensitivity analysis on the expected case scenario.SCENARIO ANALYSISa 51. What is the earnings before interest and taxes under the expected case scenario?a. $18,000b. $24,000c. $36,000d. $48,000e. $54,000Difficulty level: MediumSCENARIO ANALYSISc 52. What is the earnings before interest and taxes under anoptimistic case scenario?a. $22,694.40b. $24,854.40c. $37,497.60d. $52,694.40e. $67,947.60Difficulty level: ChallengeSCENARIO ANALYSISb 53. What is the earnings before interest and taxes under the pessimistic case scenario?b. -$422.40c. -$278.78d. $3,554.50e. $5,385.60Difficulty level: ChallengeSENSITIVITY ANALYSISd 54. What is the operating cash flow for a sensitivity analysis using total fixed costs of$32,000?a. $14,520b. $16,520c. $22,000d. $44,520e. $52,000Difficulty level: MediumSENSITIVITY ANALYSISd 55. What is the contribution margin for a sensitivity analysis using a variable cost per unitof $8?a. $3b. $4c. $5d. $6e. $7Difficulty level: MediumVARIABLE COSTc 56. A firm is reviewing a project with labor cost of $8.90 per unit, raw materials cost of$21.63 a unit, and fixed costs of $8,000 a month. Sales are projected at 10,000 unitsover the three-month life of the project. What are the total variable costs of the project?a. $216,300b. $297,300c. $305,300d. $313,300e. $329,300Difficulty level: MediumVARIABLE COSTd 57. A project has earnings before interest and taxes of $5,750, fixed costs of $50,000, aselling price of $13 a unit, and a sales quantity of 11,500 units. Depreciation is $7,500.What is the variable cost per unit?a. $6.75c. $7.25d. $7.50e. $7.75Difficulty level: MediumFIXED COSTb 58. At a production level of 5,600 units a project has total costs of $89,000. The variablecost per unit is $11.20. What is the amount of the total fixed costs?a. $24,126b. $26,280c. $27,090d. $27,820e. $28,626Difficulty level: MediumFIXED COSTe 59. At a production level of 6,000 units a project has total costs of $120,000. The variablecost per unit is $14.50. What is the amount of the total fixed costs?a. $25,165b. $28,200c. $30,570d. $32,000e. $33,000Difficulty level: MediumCONTRIBUTION MARGINc 60. Wilson’s Meats has computed their fixed costs to be $.60 for every pound of meatthey sell given an average daily sales level of 500 pounds. They charge $3.89 perpound of top-grade ground beef. The variable cost per pound is $2.99. What is thecontribution margin per pound of ground beef sold?a. $.30b. $.60c. $.90d. $2.99e. $3.89Difficulty level: MediumCONTRIBUTION MARGINe 61. Ralph and Emma’s is considering a project with total sales of $17,500, total variablecosts of $9,800, total fixed costs of $3,500, and estimated production of 400 units. Thedepreciation expense is $2,400 a year. What is the contribution margin per unit?a. $4.50b. $10.50d. $19.09e. $19.25Difficulty level: MediumACCOUNTING BREAK-EVENa 62. You are considering a new project. The project has projected depreciation of $720,fixed costs of $6,000, and total sales of $11,760. The variable cost per unit is$4.20. What is the accounting break-even level of production?a. 1,200 unitsb. 1,334 unitsc. 1,372 unitsd. 1,889 unitse. 1,910 unitsDifficulty level: MediumACCOUNTING BREAK-EVENb 63. The accounting break-even production quantity for a project is 5,425 units. The fixedcosts are $31,600 and the contribution margin is $6. What is the projecteddepreciation expense?a. $700b. $950c. $1,025d. $1,053e. $1,100Difficulty level: MediumACCOUNTING BREAK-EVENd 64. A project has an accounting break-even point of 2,000 units. The fixed costs are$4,200 and the depreciation expense is $400. The projected variable cost per unit is$23.10. What is the projected sales price?a. $20.80b. $21.00c. $21.20d. $25.40e. $25.60Difficulty level: MediumACCOUNTING BREAK-EVENa 65. A proposed project has fixed costs of $3,600, depreciation expense of $1,500, and asales quantity of 1,300 units. What is the contribution margin if the projected level ofsales is the accounting break-even point?a. $3.92c. $4.50d. $4.80e. $5.00Difficulty level: MediumPRESENT VALUE BREAK-EVENc 66. A project has a contribution margin of $5, projected fixed costs of $12,000, projectedvariable cost per unit of $12, and a projected present value break-even point of 5,000units. What is the operating cash flow at this level of output?a. $1,000b. $12,000c. $13,000d. $68,000e. $73,000Difficulty level: MediumPRESENT VALUE BREAK-EVENa 67. Thompson & Son have been busy analyzing a new product. They have determined thatan operating cash flow of $16,700 will result in a zero net present value, which is acompany requirement for project acceptance. The fixed costs are $12,378 and thecontribution margin is $6.20. The company feels that they can realistically capture10 percent of the 50,000 unit market for this product. Should the company develop thenew product? Why or why not?a. yes; because 5,000 units of sales exceeds the quantity required for a zero net presentvalueb. yes; because the internal break-even point is less than 5,000 unitsc. no; because the firm can not generate sufficient sales to obtain at least a zero netpresent valued. no; because the project has an expected internal rate of return of negative 100percente. no; because the project will not pay back on a discounted basisDifficulty level: ChallengePRESENT VALUE BREAK-EVENe 68. Kurt Neal and Son is considering a project with a discounted payback just equal to theproject’s life. The projections include a sales price of $11, variable cost per unit of$8.50, and fixed costs of $4,500. The operating cash flow is $6,200. What is the break-even quantity?a. 1,800 unitsb. 2,480 unitsc. 3,057 unitsd. 3,750 unitse. 4,280 unitsDifficulty level: MediumDECISION TREE NET PRESENT VALUEb 69. At stage 2 of the decision tree it shows that if a project is successful, the payoff will be$53,000 with a 2/3 chance of occurrence. There is also the 1/3 chance of a $-24,000payoff. The cost of getting to stage 2 (1 year out) is $44,000. The cost of capital is15%. What is the NPV of the project at stage 1?a. $-13,275b. $-20,232c. $ 2,087d. $ 7,536e. Can not be calculated without the exact timing of future cash flows.Difficulty level: MediumUse the following to answer questions 70-71:The Quick-Start Company has the following pattern of potential cash flows with their planned investment in a new cold weather starting system for fuel injected cars.DECISION TREEa 70. If the company has a discount rate of 17%, what is the value closest to time 1 netpresent value?a. $ 48.6 millionb. $ 80.9 millionc. $108.2 milliond. $181.4 millione. None of the above.Difficulty level: ChallengeDECISION TREEb 71. If the company has a discount rate of 17%, should they decide to invest?a. yes, NPV = $ 2.2 millionb. yes, NPV = $ 21.6 millionc. no, NPV = $-1.9 milliond. yes, NPV = $ 8.6 millione. No, since more than one branch is NPV = 0 or negative you must reject.Difficulty level: ChallengeACCOUNTING BREAK-EVENe 72. The Mini-Max Company has the following cost information on their new prospectiveproject. Calculate the accounting break-even point.Initial investment: $700。
公司理财罗斯英文原书第九版第二章
Financial Statements and Cash Flow
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Key Concepts and Skills
Usually a separate section reports the amount of taxes levied on income.
$86 $43 $43
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U.S.C.C. Income Statement
Total operating revenues Cost of goods sold Selling, general, and administrative expenses Depreciation Operating income Other income Eห้องสมุดไป่ตู้rnings before interest and taxes Interest expense Pretax income Taxes Current: $71 Deferred: $13 Net income Retained earnings: Dividends: $2,262 1,655 327 90 $190 29 $219 49 $170 84
Deferred taxes Long-term debt Total long-term liabilities $117 471 $588 $104 458 $562
Total assets
$1,879
$1,742
Stockholder's equity: Preferred stock $39 $39 Common stock ($1 par value) 55 32 Capital surplus 347 327 Accumulated retained earnings 390 347 Less treasury stock (26) (20) Total equity $805 $725 Total liabilities and stockholder's equity $1,879 $1,742
CashandNon-operatingAssets
Cash and Non-operating AssetsThe operating income is the income from operating assets, and the cost of capital measures the cost of financing these assets. When the operating cash flows are discounted to the present, you have valued the operating assets of the firm. Firms, however, often have significant amounts of cash and marketable securities on their books, as well as holdings in other firms and non-operating assets. The value of these assets should be added to the value of the operating assets to arrive at firm value. Some analysts prefer to consider the income from cash and marketable securities in their cash flows and adjust the discount rate1 to reflect the safety of these assets. When done right, this approach should yield the same firm value.Cash and Marketable SecuritiesFirms often hold substantial amounts in cash and other marketable securities. When valuing firms, you should add the value of these holdings to the value of the other operating assets to arrive at the firm value. In this section, you first consider how to deal with cash and near cash investments (such as government securities) and then consider holdings of more risky marketable securities.Cash and Near-cash InvestmentsInvestments in short-term government securities or commercial paper, which can be converted into cash quickly and with very low cost, are considered near-cash investments. When valuing a firm, you add the value of cash balances and near-cash investments to the value of operating assets.There is, however, one consideration that may affect how cash is treated. If a firm needs cash for its operations – an operating cash balance – you should consider such cash part of working capital requirements rather than as a source of additional value. Any cash and near-cash investments that exceed the operating cash requirements can be then added on to the value of operating assets. How much cash does a firm need for its operations?1 When a firm has cash and marketable securities the unlevered beta has to be adjusted downwards to reflect the safety of these assets.The answer depends upon both the firm, and the economy in which the firm operates. A small retail firm in an emerging market, where cash transactions are more common than credit card transactions, may require an operating cash balance that is substantial. In contrast, a manufacturing firm in a developed market may not need any operating cash. In fact, if the cash held by a firm is interest-bearing, and the interest earned on the cash reflects a fair rate of return2, you would not consider that cash to be part of working capital. Instead, you would add it to the value of operating assets to value the firm.Other Marketable SecuritiesMarketable securities can include corporate bonds, with default risk embedded in them, and traded equities, which have even more risk associated with them. As the marketable securities held by a firm become more risky, the choices on how to deal with them become more complex. You have three ways of accounting for marketable securities:•The simplest and most direct approach is to estimate the current market value of these marketable securities and add the value on to the value of operating assets. For firms valued on a going-concern basis, with a large number of holdings of marketablesecurities, this may be the only practical option.•The second approach is to estimate the current market value of the marketable securities and net out the effect of capital gains taxes that may be due if thosesecurities were sold today. This capital gains tax bite depends upon how much was paid for these assets at the time of the purchase and the value today. This is the best way of estimating value when valuing a firm on a liquidation basis.•The third and most difficult way of incorporating the value of marketable securities into firm value is to value the firms that issued these securities and estimate the value of these securities. This approach tends to work best for firms that have relatively few, but large, holdings in other publicly traded firms.Holdings in Other Firms2 Note that if the cash is invested in riskless assets such as treasury bills, the riskless rate is a fair rate of return.In this category, you consider a broader category of non-operating assets, where you look at holdings in other companies, public as well as private. You begin by looking at the differences in accounting treatment of different holdings, and how this treatment can affect the way they are reported in financial statements.Accounting TreatmentThe way in which these assets are valued depends upon the way the investment is categorized and the motive behind the investment. In general, an investment in the securities of another firm can be categorized as a minority, passive investment; a minority, active investment; or a majority, active investment, and the accounting rules vary depending upon the categorization.Minority, Passive InvestmentsIf the securities or assets owned in another firm represent less than 20% of the overall ownership of that firm, an investment is treated as a minority, passive investment. These investments have an acquisition value, which represents what the firm originally paid for the securities, and often a market value. Accounting principles require that these assets be sub-categorized into one of three groups - investments that will be held to maturity, investments that are available for sale and trading investments. The valuation principles vary for each.•For investments that will be held to maturity, the valuation is at historical cost or book value, and interest or dividends from this investment are shown in the income statement.•For investments that are available for sale, the valuation is at market value, but the unrealized gains or losses are shown as part of the equity in the balance sheet and not in the income statement. Thus, unrealized losses reduce the book value of the equity in the firm, and unrealized gains increase the book value of equity.•For trading investments, the valuation is at market value and the unrealized gains and losses are shown in the income statement.Firms are allowed an element of discretion in the way they classify investments and through this choice, in the way they value these assets. This classification ensures that firms such as investment banks, whose assets are primarily securities held in other firmsfor purposes of trading, revalue the bulk of these assets at market levels each period. This is called marking-to-market, and provides one of the few instances in which market value trumps book value in accounting statements.Minority, Active InvestmentsIf the securities or assets owned in another firm represent between 20% and 50% of the overall ownership of that firm, an investment is treated as a minority, active investment. While these investments have an initial acquisition value, a proportional share (based upon ownership proportion) of the net income and losses made by the firm in which the investment was made, is used to adjust the acquisition cost. In addition, the dividends received from the investment reduce the acquisition cost. This approach to valuing investments is called the equity approach.The market value of these investments is not considered until the investment is liquidated, at which point the gain or loss from the sale, relative to the adjusted acquisition cost is shown as part of the earnings in that period.Majority, Active InvestmentsIf the securities or assets owned in another firm represent more than 50% of the overall ownership of that firm, an investment is treated as a majority active investment3. In this case, the investment is no longer shown as a financial investment but is instead replaced by the assets and liabilities of the firm in which the investment was made. This approach leads to a consolidation of the balance sheets of the two firms, where the assets and liabilities of the two firms are merged and presented as one balance sheet. The share of the firm that is owned by other investors is shown as a minority interest on the liability side of the balance sheet. A similar consolidation occurs in the other financial statements of the firm as well, with the statement of cash flows reflecting the cumulated cash inflows and outflows of the combined firm. This is in contrast to the equity approach, used for minority active investments, in which only the dividends received on the investment are shown as a cash inflow in the cash flow statement.3 Firms have evaded the requirements of consolidation by keeping their share of ownership in other firms below 50%.Here again, the market value of this investment is not considered until the ownership stake is liquidated. At that point, the difference between the market price and the net value of the equity stake in the firm is treated as a gain or loss for the period.Valuing Cross Holdings in other FirmsGiven that the holdings in other firms can accounted for in three different ways, how do you deal with each in valuation?1.If the holdings are treated as minority, passive investments, and the investments arereported in the balance sheet at the original cost or book value, you would value the firm in which these holdings are, and consider the proportion of the value thatcomes from the holding. For instance, assume that a firm owns 20% of anotherfirm that has an estimated value of $ 500 million. The estimated value of thisholding is $ 100 million.2.If the holdings are minority, passive investments and the investments are recordedat market value, you have one of two choices. You can assume that the market iscorrect and use the assessed market value of these cross-held assets to value thefirm. Alternatively, you can value the companies in which the investments havebeen made and add the estimated value of the holdings to the value of operatingassets.3.If the holdings are minority active interests, you need to value the firms in whichthese holdings are, and add the proportion of that value to the value of theoperating assets of the firm.4.If the holdings are majority, active interests, the income statements areconsolidated. Consequently, the operating income of the firm includes the totaloperating income from the subsidiary, rather than the firm’s share of the subsidiary.You estimate the value of the subsidiary and add on the portion of the value thataccrues to the parent company. Where, you might ask, is the minority interest that you see on the parent company’s balance sheet? You do not use it directly, since it reflects the book value of the holdings of others in the subsidiaries rather thanmarket value.Other Non-Operating AssetsFirms can have other non-operating assets, but they are likely to be of less importance than those listed above. In particular, firms can have unutilized assets that do not generate cash flows and have book values that bear little resemblance to market values. An example would be prime real estate holdings that have appreciated significantly in value since the firm acquired them, but produce little if any cash flows. An open question also remains about overfunded pension plans. Do the excess funds belong to stockholders and, if so, how do you incorporate the effect into value?Unutilized AssetsThe strength of discounted cash flow models is that they estimate the value of assets based upon expected cash flows that these assets generate. In some cases, however, this can lead to assets of substantial value being ignored in the final valuation. For instance, assume that a firm owns a plot of land that has not been developed, and that the book value of the land reflects its original acquisition price. The land obviously has significant market value but does not generate any cash flow for the firm yet. If a conscious effort is not made to bring the expected cash flows from developing the land into the valuation, the value of the land will be left out of the final estimate.How do you reflect the value of such assets in firm value? An inventory of all such assets (or at least the most valuable ones) is a first step, followed up by estimates of market value for each of the assets. These estimates can be obtained by looking at what the assets would fetch in the market today or by projecting the cash flows that could be generated if the assets were developed and discounting the cash flows at the appropriate discount rate.The problem with incorporating unutilized assets into firm value is an informational one. Firms do not reveal their unutilized assets as part of their financial statements. While it may sometimes be possible to find out about such assets as investors or analysts, it is far more likely that they will be uncovered only when you have access to information about what the firm owns and uses.Pension Fund AssetsFirms with defined pension liabilities sometimes accumulate pension fund assets in excess of these liabilities. While the excess does belong to stockholders, they usuallyface a tax liability if they claim it. The conservative rule in dealing with overfunded pension plans would be to assume that the social and tax costs of reclaiming the excess funds are so large that few firms would ever even attempt to do it. The more realistic approach would be to add the after-tax portion of the excess funds into the valuation.cash.xls: There is a dataset on the web that summarizes the value of cash and marketable securities by industry group in the United States for the most recent quarter.。
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2) Over-the-Counter Markets
Securities that are not listed on one of the exchanges trade in the over-the-counter market. This market is not organized in the sense of having a building where trading takes place. Rather, it is a linkage of many dealers and brokers who communicate with each other via telephone and computer terminals. The National Association of Securities Dealers Automated Quotation System (NSADAQ) shows bid and asked prices for thousands of OTC-traded securities on video screens hooked up to a central computer system.
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The capital markets have well-developed secondary markets. A secondary market is where the sale of previously issued securities takes place. There are two types of exchanges in the secondary market for capital securities: organized exchanges and over-the-counter (OTC) exchanges. Whereas most money market transactions originate over the phone, most capital market transactions occur in organized exchanges.