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Chapter 02 Financial Statements & Cash Flow

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Question;91. Discuss the difference between book values and;market values on the balance sheet and explain which is more important to the;financial manager and why.;92. Note that in all of our cash flow computations to;determine cash flow of the firm, we never include the addition to retained;earnings. Why not? Is this an oversight?;93. Note that we added depreciation back to operating;cash flow and to additions to fixed assets. Why add it back twice? Isn't this;double-counting?;94. Sometimes when businesses are critically;delinquent on their tax liabilities, the tax authority comes in and literally;seizes the business by chasing all of the employees out of the building and;changing the locks. What does this tell you about the importance of taxes;relative to our discussion of cash flow? Why might a business owner want to;avoid such an occurrence?

 

Paper#55068 | Written in 18-Jul-2015

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