×

### Let's log you in.

or

Don't have a StudySoup account? Create one here!

×

or

## Week 1 FIN 305 Notes

by: Alia Coughlan

53

7

5

# Week 1 FIN 305 Notes FIN 305

Marketplace > Colorado State University > Business > FIN 305 > Week 1 FIN 305 Notes
Alia Coughlan
CSU

Enter your email below and we will instantly email you these Notes for Fundamentals of Finance

(Limited time offer)

Unlock FREE Class Notes

Everyone needs better class notes. Enter your email and we will send you notes for this class for free.

Intro to the course
COURSE
Fundamentals of Finance
PROF.
John D. Hopkins
TYPE
Class Notes
PAGES
5
WORDS
KARMA
Free

## Popular in Fundamentals of Finance

This 5 page Class Notes was uploaded by Alia Coughlan on Friday August 26, 2016. The Class Notes belongs to FIN 305 at Colorado State University taught by John D. Hopkins in Fall 2016. Since its upload, it has received 53 views. For similar materials see Fundamentals of Finance in Business at Colorado State University.

×

## Reviews for Week 1 FIN 305 Notes

×

×

### What is Karma?

#### You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 08/26/16
Week 1 Notes for FIN 305 Fundamentals of Finance 8/22 Introduction and go over syllabus Begin Chapter 4 – Review of Accounting Chapter 4 – Review of Accounting Annual Reports Include: ­Income Statement ­Balance Sheet ­Statement of Cash Flows ­Statement of Retained Earnings (NOT TESTED ON) Income Statement (I.S.): Equations/Ratios to know for Income Statement: ­Revenues – Expenses = Net Income   (sales)          (taxes/salaries) *Net Income is divided into dividends and change in retained earnings ­Sales – Cost of Goods Sold (COGS) = Gross Profit ­Gross Profit – Depreciation Expense – S&A Expenses = Operating Income ­Earnings Before Interest&Taxes (EBIT) – Interest Expense (I) = Earnings Before Taxes (EBT) ­Earnings Before Taxes (EBT) – Taxes (T) = Net Income ­Net Income/Number of Outstanding Shares = Earnings per Share Balance Sheet (B.S.): ­Assets = Liabilities + Owners Equity *Assets is split into current assets and fixed assets *Liabilities is split into current liabilities and long­term liabilities *Owners Equity is split into common stock, capital in excess par, and retained earnings 8/24 Continuation of Chapter 4 – Review of Accounting Current Assets to know: ­Cash ­Marketable Securities ­Accounts Receivable ­Inventory ­Prepaid Expenses Fixed Assets Equation: ­Fixed Assets = Gross Fixed Assets – Accumulated Depreciation Current Liabilities to know: ­Accounts Payable ­Notes Payable ­Accrued Expenses *Accrued Expenses = when you owe someone money but there is no bill yet Owners Equity: ­Common Stock ­Common Stock = Par Value x Number of Shares *Par Value = stated value printed on the stock certificate ­Capital in Excess Par ­Price Stock = IPO – Par Value ­Capital in Excess Par = IPO – Par Value x Number of Shares ­IPO = Common stock + Capital in Excess/Outstanding Shares *IPO = Initial Public Offering ­Retained Earnings Statement of Cash Flows (S.C.F.): ­Finance is all about cash ­Cash Inflows – Cash Outflows = Change in Cash *Income is reported when earned *Expenses are reported when liability is established Three Parts to the Statement of Cash Flows: ­Operations ­Investment Activities ­Financial Activities Operations: ­Based on assumptions ­Adjustments needed ­add back non­cash deductions  ­ex: Depreciation and Amortization *Depreciation = Hard asset. ex: Real Estate and Buildings *Amortization = Intangible asset. ex: Patents and Copyrights ­Changes in other current assets besides cash (see list) ­Change in current asset = beginning current asset    ­ ending current asset * A decrease in a current asset increases cash *An increase in a current asset decreases cash * If the ending is bigger than the beginning, we got cash and vice versa ­Change in current liability = ending current liability       ­ beginning current liability *A decrease in a current liability decreases cash *An increase in a current liability increase cash ­Cash Received from Operations = Net Income from I.S. + Depreciation Expense ± ∆ in current liabilities ± ∆ in current assets  8/26 Continuation of Chapter 4 – Review of Accounting Investment Activities: ­Results from buying & selling long term assets ­ex: equipment, companies ­Assumptions ­Purchases use cash ­Sales are a source of cash ­Cash Received from Investment Activities = ­ Fixed Asset Purchases     + Fixed Asset Sales      ±Long Term Securities Financing Activities: ­Sale of corporate securities is a source of cash ­Purchase of corporate securities is a use ­Borrowing is a source of cash ­Paying off debt is use of cash ­Dividends paid are a use of cash * Dividends are never deductible on income statements ­Cash Received from Financing Activities =  + Sale of Corporate Securities ­Purchase of Corporate Securities ±Notes Payable ­Dividends Paid on Common Stock Depreciation: ­Accounting Depreciation = the allocation of an asset’s initial cost over time ­Matching Principle = expenses should be matched to the revenues they help  generate ­Allowable depreciation expense is determined by established accounting rules ­Calculations Needed: ­Depreciable Basis = Total amount to be depreciated ­Depreciable Basis = Cost of Asset + Delivery Expense + Setup Costs ­Current Years Depreciation Expense ­Depreciation Methods: ­Straight Line Method – Financial Recording ­Divide the cost of the asset by the number of years of life for the asset & charge the result off as depreciation expense each year ­Modified Accelerated Cost Recovery System (MACRS) – Tax Use

×

×

### BOOM! Enjoy Your Free Notes!

×

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

## Why people love StudySoup

Jim McGreen Ohio University

#### "Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Amaris Trozzo George Washington University

#### "I made \$350 in just two days after posting my first study guide."

Bentley McCaw University of Florida

Forbes

#### "Their 'Elite Notetakers' are making over \$1,200/month in sales by creating high quality content that helps their classmates in a time of need."

Become an Elite Notetaker and start selling your notes online!
×

### Refund Policy

#### STUDYSOUP CANCELLATION POLICY

All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email support@studysoup.com

#### STUDYSOUP REFUND POLICY

StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here: support@studysoup.com

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to support@studysoup.com