BU393 Chapter Notes - Chapter 14: Financial Statement, Capital Expenditure, Retained Earnings
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Industry quantity in period t and market share of firm in period t: ex. Ca(cid:374)ada"s s(cid:373)a(cid:396)tpho(cid:374)e sales a(cid:396)e e(cid:454)pe(cid:272)ted to (cid:271)e 1. (cid:1009) (cid:271)illio(cid:374) u(cid:374)its (cid:374)e(cid:454)t (cid:455)ea(cid:396). Apple"s s(cid:373)a(cid:396)tpho(cid:374)e (cid:373)a(cid:396)ket sha(cid:396)e (cid:449)as (cid:1008)7% last (cid:455)ea(cid:396) a(cid:374)d is expected to remain constant next year. The price of an iphone was last year and is the same (cid:374)e(cid:454)t (cid:455)ea(cid:396). What is apple"s fo(cid:396)e(cid:272)asted sales (cid:396)e(cid:448)e(cid:374)ue (cid:374)e(cid:454)t (cid:455)ea(cid:396): quantity forecast = 1. 5 billion x 0. 47 = 0. 705 or 705 million, sales revenue = (300) (705 million) = . 5 billion, sales forecast for retailers. Accounts) do not have a proportionate relationship to sales: e(cid:454). Interest: not tied to sales, but tied to debt. Interest expense = (interest rate) (book value of debt from end of last. Year: depreciation, tied to fixed assets, declining balance: dedu(cid:272)ts a fi(cid:454)ed pe(cid:396)(cid:272)e(cid:374)tage of a(cid:374) asset"s (cid:448)alue ea(cid:272)h year, depreciation = (depreciation rate) (book value of assets last.
