BUS 330 Lecture Notes - Lecture 5: Income Statement, Nopat, Fixed Asset
Document Summary
Bus 330 finance | chapter 4 cash flow, financial planning. Cash flow is primary ingredient in any financial val model. Depreciation = not exactly affecting every day cash i. e. used textbooks when you sell it back, it"s not valued at the same as when you bought it as a new book. Use of macrs in finance instead of straight line method: macrs = modified accelerated cost recovery system. If hold it long enough, will depreciate to 0. Property classes: 3yr i. e. tools and research equip, 5yr, 7yr, 10 yr. Investment flows make money on making investments in other businesses or assets. Like i/s cash flows is a financial statement. Operating cash flows directly from running bus. Financing flow borrowing money or paying money back. Inflows and outflows: assets increase cash decreases, liabilities increase cash increases. Ties balance sheet at beginning of period w/ balance sheet at end of period after considering perf of firm during period through income statement.