英语论文网

PAT or Free Cash Flow) that investors need to measure and forecast
Four theoretically equivalent valuation models are useful both for identifying key accounting variables:
Dividend valuation model
Free cash flow valuation model
Abnormal earnings valuation model
Abnormal operating income valuation model
Key equity valuation models

3. The main financial statements

Main financial statements under IFRS and US GAAP are the Balance sheet, the Income Statement, and the Cash Flow Statement
Balance sheet is the position statement showing assets, liabilities and equity capital
Income statement explains (part of) the change in equity between two balance sheet dates
Cash flow statement explains the change in the cash position between two balance sheet dates
Balance sheet
Basic balance sheet identity used in US financial statements and also widely used under IFRS:
Assets   Liabilities + Equity
Alternative version of this identity used in most UK company accounts and permitted under IFRS:
Assets – Liabilities  Equity
Balance sheet provides a snapshot of the assets and liabilities of a business at a given date
Assets traditionally valued at ‘historic cost’, tho’ there have been recent moves by FASB and IASB towards increasing use of ‘fair values’ in financial statements
Balance Sheet for Wm Morrison plc for 2009, 2008 and 2007
Balance Sheet for Wm Morrison plc for 2009, 2008 and 2007 (continued)
Income Statement
Income statement measures financial performance using an accrual (as opposed to a cash flow) basis
Operating profit measures financial performance in relation to all investors
Net profit measures financial performance in relation to the shareholders
Important concepts underlying the income statement are:
Accrual basis for recognising revenue
Matching of revenue and related expenses
Income Statement for Wm Morrison plc 2009, 2008 and 2007
Cash flow statement
Cash flow statement provides information on the operating, investing and financing cash flows of a business
Cash flow statement is useful for providing information on:
liquidity of a business
quality of earnings
major financing and  investment transactions
Cash flow statement widely regarded as less useful than P&L account for financial analysis (and in particular equity valuation, see Topic 2)
Cash flow statement for Wm Morrison plc 2009, 2008 and 2007
Cash flow statement for Wm Morrison plc 2009, 2008 and 2007 (continued)
Links between financial statements
Cash flow statement explains the change in cash and short term deposits net of bank overdrafts in the balance sheet

Link between cash flow and profit is demonstrated by the indirect method of calculating Cash flow from operations (see cash flow statement slide 18 or note 24 of accounts for details)
Links between financial statements (continued)
Net Profit less dividends from the Income Statement for the year feeds into Retained Earnings in the equity section of the balance sheet (reflecting the idea that net profit is an accountant’s measure of shareholder wealth generated by the firm over the period). 
 Note 23 shows Total Recognised Income and Expenses of £402m for 2009 (this is net profit of £460m after adjustment for some items which do not pass through income statement) as an increase in Retained Earnings and Dividends of £131m for 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。