FIN 300 Lecture Notes - Lecture 4: Inventory Turnover, Treasury Stock, Capital Intensity
Document Summary
Net capital spending = ending fixed assets beginning fixed assets + depreciation. Changes in nwc = ending nwc beginning nwc. Cash flow to creditors = interest paid net new borrowing = interest paid (ending long-term debt beginning long-term debt) Cash flow to stockholders = dividends paid net new equity raised. = dividends paid (ending common stock, additional paid-in- capital, & treasury stock beginning common stock, additional paid-in-capital, & treasury stock) Cash flow from assets = cash flow to creditors. Cffa = operating cash flow net capital spending changes in net working capital. Operating cash flow = ebit + depreciation taxes. Retention ratio = addition to retained earnings / net income. Retention (plowback) ratio = b = 1 dividend payout ratio. Internal growth rate = (roa x b) / [1 roa x b] Sustainable growth rate = (roe x b) / [1 roe x b] Roe = profit margin x total asset turnover x equity multiplier.
