MKT 100 Lecture Notes - Lecture 2: Dont, Gross Margin, Project A

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Pauline Fu

Document Summary

Goal of the firm, agency problems and costs. Goal of the firm, in the long-term, is to maximize shareholder value (current stock price); not maximize profits, market share, etc the goal is to maximize shareholder value (current share price) Uses and sources of cash: increase in assets and decrease in liabilities and equity are uses of cash; decrease in assets and increase in liabilities and equity are. Cash flow to creditors, cash flow to shareholders, cash flow from assets, Cash flow to creditors/bondholders/debt holders = interest (long-term debt [ltd] current year ltd previous year). Interest found on income statement, ltd on balance sheet. Cash flow to shareholders/stockholders = dividends - (common stock current year common stock previous year). Dividends found on income statement, common stock on balance sheet. Dividends may not be given directly; if not, dividends = 1) ni additions to re or 2) ni*dividend payout ratio. Current liabilities (cl) = accounts payable (ap) + notes payable.