Accounting & Fin statements Flashcards
What measure of free cash flow takes into account the repayment of debentures?
Equity cash flow - this is remaining left to shareholders.
Enterprise FCF?
FCF before considering payments made to any providers of finance to the firm
Bank overdraft is..
Liability
Prepayments and trade receivables are..
current assets
Other names for bonus issues and what this means?
Capitalisation and scrip issues.
Free shares are issued to investors so no additional funds are raised
Where is a deferred tax liability found?
Balance sheet
What happens when expenditure is capitalised?
Increase in non-current assets rather than a decrease in profit
Cash will decrease
Accetable use of share premium account?
To account for IPO costs
To cover NV of new shares issued via a capitlisation/bonus issue
What is used to cover payment of dividends if profits aren’t enough and what is this called?
Retained earnings
Uncovered dividend
Do stock splits impact the balance sheet?
No
Sale of NCA - what would this show in BS?
NCA sale would show a reduction in NCA and corresponding increase in cash of current assets
What is work in progress?
Stock = current asset
Prepayment?
Expense paid in advance = current asset
What is capitalised development costs?
Intangible non current asset
What does EPS remove?
Tax
Interest
Preference share dividends
Minority interests
Proceeds on issue of bonds and equities - what does this represent?
Net cash flow in relation to financing activities during the accounting period
Where does investments in associates appear?
Non current asset
Capital redemption reserve?
Created when a company buys back its shares and cancels them
Cash flow for equity holders?
Equity cash flow
Market value of all debt and equity
Enterprise value
Free cash flow to the firm
Enterprise cash flow
Warrants and share capital?
Not part of share capital prior to exercise
Provisions?
Non current liabilities
Stock split and overall value of shares?
Value will be unchanged
Value of equity is unchanged so debt to euqity ratio is also unchanged
Price return vs. total return difference?
Price performance disregards income from divs whereas total return looks at both
div cover - other equation?
Profit after tax / Net dividend
interest coverage equation
EBIT/interest payable
What effect does depreciating an asset over a longer period of time have?
Lower depreciation charge, increase EBIT
Capital employed - two equations
= total assets - current liabilities
= equity + non current liabilities
