Ch2 Notes Jan3,2018

Topics 1. Financial Statements Review

2. Free Cash Flow

3. How to value a firm

Calculation EBITDA,
EBIT,
NOPAT,
NI,
NCF,
NOWC, TNOC (OC),
FCF
ROIC, EVA and MVA

Questions 1. What are characters of Financial Reports (Balance Sheet, Income

Statement, Statement of Cash Flow, Statement of Changes in Equity)

2. Explain basic accounts under these reports. Read textbook: P26-36

How can you identify the required values in financial statements when
calculating FCF? Read textbook P29-40, highlight all formulas.

3. Why is FCF the most important measure of cash flow? Read textbook P41.

4. List the five uses of FCF and calculation example. Read textbook P41

5. How to calculate ROIC, EVA and MVA? Read textbook P41-44

Examples Canada Goose Financial Statements

Uber

P51 Questions 2-1 for concept review.

P37 Figure 2-1 for FCF calculation

P52, Problems: 2-1,2,3,4 and 6

P53, P2-12,13,16