BUS 330 Lecture Notes - Lecture 4: Operating Cash Flow, Nopat, Cash Flow

• School: Stony Brook University
• Department: Business Management
• Course: BUS 330
• Professor: Michael Nugent

Document Summary

Bus 330 finance | chapter 4 ppt notes. Cash flow == primary ingredient in financial valuation model. Focus = operating cash flow (used in decision making), free cash flow (monitored by participants in capital markets) Depreciation portion of costs of fixed assets charged against annual revenues over time. For tax purposes determined by using macrs (modified accelerated cost recov syst: depreciable val of assest = full cost including outlays for installation, no adjustment for expected salvage val. Summarizes firm"s cash flow over given time. Inflows: decrease in any asset, increase in any liab, net profits after taxes, depreciation and other noncash charges, sale of stock. Outflows: increase in any asset, decrease in any liability, net loss after taxes, dividends paid, repurchase or retirement of stock. Ties balance sheet at beginning of period w/ bs at end considering perf of furm during period. Net incr/decr in cash & mktble securities should be equiv to diff b/w cash & mktbl securities on.