FIN 320 Lecture Notes - Sole Proprietorship, Capital Structure, Revolving Credit
Document Summary
Goal of financial manager is to maximize market value. Dj colantone class notes- fin: balance sheet, assets= liabilities + stockholder"s equity, point at time. Income statement: period of time, assets, current vs. Changes in net working income: ocf= ebit + depreciation- taxes, cash flow from assets = cash flow to creditors + cash flow to. Stockholders: cf to cr= interest paid net new borrowing. Book value of all liabilities cash: ebitda ratio = enterprise value / ebitda. Compound interest: compound earns interest on interest, simple is just on the principle. Present values: fv/(1+r)t, discounting = finding the present value of one or more future amounts. Important relationships: for a given interest rate, the longer period of time, the lower the present value, the higher the interest rate, the smaller the present value. Dj colantone class notes- fin: perpetuity formula- pv= pmt/r.
