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Introduction to Finance: Balance Sheet and Income Statement. Annual Report. Letter from Management. Summary of Activities over the past year. Assessment of Future Prospects. Financial Information. Financial Information. Balance Sheet Income Statement Cash Flows Notes. Balance Sheet.
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Annual Report • Letter from Management. • Summary of Activities over the past year. • Assessment of Future Prospects. • Financial Information N. Takezawa (ICU) 2002
Financial Information • Balance Sheet • Income Statement • Cash Flows • Notes N. Takezawa (ICU) 2002
Balance Sheet • “Snap-shot”– summary of investing and financing activities at a point in time. • Assets (investing): “economic resources” which provide future benefits. • Liabilities and Shareholder Equity (financing): creditors and owner’s “claim on assets.” N. Takezawa (ICU) 2002
Purchase Assets 資産購入 Raise Cash 資金調達 Produce Goods Assets (資産) Current Assets (流動資産) Fixed Assets (固定資産) Debt,Liability (借入、負債) Equity (株主資本) Balance retained earnings Earnings, Net Income N. Takezawa (ICU) 2002
Assets = Liabilities + Shareholder Equity Current Liability (<1yr) Current Assets (<1yr) Liabilities Assets Non-current Liability Contribution Capital Non-current Assets Shareholder Equity Retained Earnings N. Takezawa (ICU) 2002
Assets • Current Assets: cash, short-term marketable securities, accounts receivable (amount expected from customers from sales/services), inventory (supplies, finished goods). • Fixed Assets [property, plant equipment]: tangible long-lived assets such as buildings, machinery, computers, etc. • Investments: examples include long term securities of other firms such as common stock. N. Takezawa (ICU) 2002
Liabilities • Current liabilities: short term (under a year) notes, bonds. Liabilities to suppliers, employees,… • Long term (non-current): Examples include bonds, mortgages,… N. Takezawa (ICU) 2002
Income Statement • Summarizes operations, activities over time period. • Revenues: inflow of assets (or reduction in liabilities) – revenue generation. • Expenses: outflow of assets (or increase in liabilities) used in generating revenues. • Net Income: Revenues-Expense. Noteexpense includes interest payments and taxes. N. Takezawa (ICU) 2002
Exercise • Find corporate website for Sony (English or Japanese) • Find Investor Relations page. • Find annual report (2002) and related information. • Obtain copy of balance sheet and income statement from the annual report. N. Takezawa (ICU) 2002
Balance Sheet Current Asset Cash Inventory Accounts Receivable Fixed Asset (PPE) 貸借対照表 流動資産 現金 在庫(原材料、製品) 売掛金 固定資産 (設備、機械) Glossary N. Takezawa (ICU) 2002
Current Liability Accounts Payable Short-term Debt Long-term Debt Shareholder Equity Retained Earnings Contributed Capital 流動負債 買掛金 短期借入金 長期借入金 株主資本 保留利益 払込資本金、出資金 N. Takezawa (ICU) 2002