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Module 2: Reformulation

Module 2: Reformulation. Mairin Talerico. Balance Sheet. Split 2% Sales. Computation of EA. Computation of EL & NEA. Computation of FA. Computation of FL. Toyota is a net borrower because it has net financial liabilities. Check if CSE=NEA-NFL. Income Statement.

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Module 2: Reformulation

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  1. Module 2: Reformulation Mairin Talerico

  2. Balance Sheet Split 2% Sales

  3. Computation of EA

  4. Computation of EL & NEA

  5. Computation of FA

  6. Computation of FL Toyota is a net borrower because it has net financial liabilities.

  7. Check if CSE=NEA-NFL

  8. Income Statement

  9. Statement of Comprehensive Income

  10. Computation of EPAT

  11. Computation of Tax Expense No tax shield Paying more tax due to Toyota’s leverage

  12. Computation of FEAT

  13. Check if CI=EPAT+FEAT

  14. Issues Encountered • Foreign reporting entity • 20-F statements report only current year F/S in US Dollars • Comprehensive income statement for only 2013 • Will “Interest + dividend income” need separating? • Interest income > interest expense – Pay more Tax • “Other income” and “other XXX” categories • 2 lines of business • Car production and financing  Context is key to classify enterprise activities

  15. Questions?

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