公司理财实务英文版(ppt16).pptx

IntroductiontoCorporateFinanceCorporateFinanceaddressesthefollowingthreequestions:Whatlong-terminvestmentsshouldthefirmengagein?Howcanthefirmraisemoneyfortherequiredinvestments?Howmuchshort-termcashflowdoesacompanyneedtopayitsbills?(RWJch.1)

TheBalance-SheetModeloftheFirmCurrentAssetsFixedAssets1Tangible2IntangibleTotalValueofAssets:Shareholders’EquityCurrentLiabilitiesLong-TermDebtTotalFirmValuetoInvestors:

TheBalance-SheetModeloftheFirmCurrentAssetsFixedAssets1Tangible2IntangibleShareholders’EquityCurrentLiabilitiesLong-TermDebtWhatlong-terminvestmentsshouldthefirmengagein?TheCapitalBudgetingDecision(InvestmentDecision)

TheBalance-SheetModeloftheFirmHowcanthefirmraisethemoneyfortherequiredinvestments?TheCapitalStructureDecision(FinancingDecision)CurrentAssetsFixedAssets1Tangible2IntangibleShareholders’EquityCurrentLiabilitiesLong-TermDebt

TheBalance-SheetModeloftheFirmHowmuchshort-termcashflowdoesacompanyneedtopayitsbills?TheNetWorkingCapitalInvestmentDecision(FinancialDecision)NetWorkingCapitalShareholders’EquityCurrentLiabilitiesLong-TermDebtCurrentAssetsFixedAssets1Tangible2Intangible

CapitalStructureThevalueofthefirmcanbethoughtofasapie.Thegoalofthemanageristoincreasethesizeofthepie.TheCapitalStructuredecisioncanbeviewedashowbesttosliceupathepie.Ifhowyouslicethepieaffectsthesizeofthepie,thenthecapitalstructuredecisionmatters.50%Debt50%Equity25%Debt75%Equity70%Debt30%Equity

Cashflow

fromfirm(C)TheFirmandtheFinancialMarketsTaxes(D)FirmGovernmentFirmissuessecurities(A)Retained

cashflows(F)Invests

inassets

(B)Dividendsand

debtpayments(E)Currentassets

FixedassetsFinancial

marketsShort-termdebtLong-termdebtEquitysharesUltimately,thefirmmustbeacashgeneratingactivity.Thecashflowsfromthefirmmuste