TMP 120 Lecture Notes - Lecture 10: Money Market Fund, Cash Flow Statement, Pro Forma
Document Summary
Cash flow statement: cash flows from operating activities: cash generated from the firm"s core business. Cash flows from investing activities: amount of cash the firm spent on investments. Capital expenditures: money spent on plant & equipment. Monetary investments: purchase or sale of money market funds: cash flows from financing activities: transactions with the company"s owners or debtors. Ratio analysis: compare a firm"s performance against their performance in another time period, other companies in their industry, and the economy, use ratios to: Analyze growth in companies: specific ratios are more meaningful to particular types of industry. Ratios are good as the financial statements they are based on: ratios pose risks because they are limited and there are loopholes to the terms & conditions. Liquidity ratios & insights: current ratio = current assets. Tells us whether the company has enough money to cover short-term debts within 1 year.
