ANALYSIS for FINANCIAL MANAGEMENT

Sixth Edition
Irwin/McGraw-Hill

Robert C. Higgins
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

. All rights reserved. Inc.Chapter 1 Interpreting Financial Statements Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies.

0 131.9 342.8 142. . All rights reserved.8 469.9 $ 79.9 19.6) 52.7 (10.7) 1.4 387.9 4.5 131.6 Continued Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies.TABLE 1-1 The Timberland Company.8 $ 75.2 (11.1 $ 151.2 25.4) 0.5 14.3) 56.0 (1.7) 4.9 20.2 (74.6 24. Inc.5 (63.2 420. plant and equipment Less accumulated depreciation and amortization Net property.4 1-3 December 31 Change in 1997 1998 Account 53. plant.1 116.1 3.2 5. Balance Sheets ($ millions) Assets Cash and marketable securities Accounts receivable Inventories Prepaid expenses and other current assets Total current assets Property. and equipment Intangible assets Other assets Total assets $ $ 98.

7 (16.8 99.0 205.1 0.5 203.1) 0.9 $ 420. Inc.7 32.5 $ 5.3 (0.2 0.6 146. .2 17.5 95.1 $ 25.0 7.1 74.5 (6.TABLE 1-1(Concluded) The Timberland Company.0 6.7 100.3) 266.5 (3.2 29.7 207.2 $ 469.1 18.3 1.4 51. Balance Sheets ($ millions) Liabilities and Shareholders' Equity Accounts payable Wages payable Income taxes payable Other accrued expenses Total current liabilities Long-term debt Deferred income taxes Total liabilities Common stock Additional paid-in capital Retained earnings Less treasury stock Total shareholders' equity Total liabilities and shareholders' equity Irwin/McGraw-Hill 1-4 December 31 Change in 1997 1998 Account $ 20.4 28. All rights reserved.1 68.1 100.3) Copyright © 2001 by The McGraw-Hill Companies.9 22.1) 214.

2 1.7 20.2 501.3 1. Inc.9 18.5 464. All rights reserved.TABLE 1-2 The Timberland Company. Income Statements ($ millions) December 31 1997 Net sales Cost of sales Gross profit Selling expenses General and administrative expenses Depreciation and amortization Amortization of goodwill Total operating expenses $ 796.7 50.2 332.1 195.3 174.4 $ 1998 862.1 361.7 51.5 Continued Irwin/McGraw-Hill 1-5 Copyright © 2001 by The McGraw-Hill Companies.7 266. .7 248.

8 59.4 16.6 87. .0 27.2 67.5 (1.9) 7.6 9.3 $ 47.2 83.7 20.9 14. All rights reserved.4 $ Copyright © 2001 by The McGraw-Hill Companies. Inc. Income Statements ($ millions) December 31 1997 Operating income Interest expense Other expense (income) Total nonoperating expense Income before income taxes Provision for income taxes Net income Irwin/McGraw-Hill 1-6 1998 94.TABLE 1-2 (Concluded) The Timberland Company.8 1.

Inc.9 $ Continued Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies.TABLE 1-3 The Timberland Company.3 71.4 1.5 51.5 0. 1998 ($ millions) 1-7 Sources Reduction in inventories Reduction in intangible assets Increase in accounts payable Increase in income taxes payable Increase in deferred income taxes Increase in stockholders' equity Total sources $ 11. Sources and Uses Statement. All rights reserved.7 5. .5 1.

Inc.2 0.9 1-8 Increase in other assets Reduction in wages payable Reduction in other accrued expenses Total uses Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies. . Sources and Uses Statement.5 4.6 6.1 3. and equipment $ 53.3 $ 71. 1998 ($ millions) Uses Increase Increase Increase Increase in in in in cash and marketable securities accounts receivable prepaid expenses and other current assets net property. plant.0 1.TABLE 1-3 (Concluded) The Timberland Company.1 3. All rights reserved.

5 84. plant and equipment Changes in current assets and liabilities: increase in accounts receivable decrease in inventory decrease in prepaid expenses increase in accounts payable increase in accrued expenses increase in accrued income taxes Net cash provided by operating activities $ 59.1 5.2 1. 1998 ($ millions) Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss on disposal of property.6 1.8) 11. Inc. All rights reserved.2 1-9 18.2 Continued Irwin/McGraw-Hill Copyright © 2001 by The McGraw-Hill Companies.3 (2. Cash Flow Statement.1 (10.TABLE 1-4 The Timberland Company.0) 0. .

TABLE 1-4 (Concluded) The Timberland Company. .Cash Flow Statement.9 53. plant.2) (21.0 Copyright © 2001 by The McGraw-Hill Companies. Inc.8 $ 152.8) (16.7) (1. and equipment Additions to property.2 98. plant.1 (10.2) 6. 1998 ($ millions) Cash Flows from Investing Activities Proceeds from sale of property. and equipment Other Net cash used by investing activities Cash Flows from Financing Activities Common stock repurchases Issuance of common stock including tax benefit Net cash used by financing activities Effect of exchange rate changes on cash Net increase in cash Cash at beginning of year Cash at end of year Irwin/McGraw-Hill 1-10 0.1) 0.1 (20. All rights reserved.

3 537 251 0. Boise ascade orp. Irwin/McGraw-Hill 1-11 Value of Equity Ratio.5 536 23. Market Value to ($ millions Book Market Book Value 530 306 0. Inc. .1 1.9 163 73 0.627 575 0. Timberland ompany Ugly Duckling orp. Ford Motor o. Inc.TABLE 1-5 The Book Value of Equity is a Poor Surrogate for the Market Value of Equity.ola Inc.403 165.409 71.365 4.919 69. Hewlett-Packard o.746 1.6 1. Yahoo Inc. All rights reserved.1 16.0 Copyright © 2001 by The McGraw-Hill Companies.576 5.0 266 506 1. astle & ooke Inc.343 1. Dow Jones & o. 1998 Company AMF Bowling Inc.852 1.4 5. Safeco orp.7 509 4.190 19.426 8. LTV orp.717 3.7 23.578 44. December 31.5 8. oca.

Sign up to vote on this title
UsefulNot useful