【正文】 ions. bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 12 CU7010598KRA Cash Flow Statement of Cash Flows ?The SCF is divided into three sections: operating, investing, and financing ?Each section shows sources and uses of funds for the accounting period ?The SCF shows the amounts for –depreciation and amortization –capital expenditures –taxes paid –dividends paid ?It does not show sources and uses by business unit ?It does not provide much detail –for example, it does not show capital expenditures by project, nor individual equipment purchases The SCF is not a substitute for cash flow analysis The statement of cash flows (SCF) found in annual reports is a good source of data for constructing cash flows, but sometimes it does not have the detail required for the analysis being done. bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 13 CU7010598KRA Cash Flow Agenda ?The importance of cash flow ?Types of cash flow ?Applications ?Cash flow steps ?Exercise ?Key takeaways bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 14 CU7010598KRA Cash Flow Applications Bain case teams use cash flow (CF) analysis to value investments/acquisitions, to improve the health of business units, and to help panies manage their portfolios. Valuation (mergers, acquisitions) Business unit analysis Portfolio management ?What is the cash generation potential of an investment/ acquisition? ?What are we willing to pay (in cash) for that investment/acquisition? ?How healthy is a business unit? ?What factors have effected the business unit’s ability to generate cash/value over time? ?How can the business unit’s cash management be improved? ?What is the overall balance of cash users/cash generators in a client’s portfolio of businesses? ?How does this effect the client’s overall cash position/outlook? ?What restructuring can be done to improve this profile? CF = mon denominator CF = measuring stick CF = portfolio tool bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 15 CU7010598KRA Cash Flow Agenda ?The importance of cash flow ?Types of cash flow ?Applications ?Cash flow steps ?Exercise ?Key takeaways bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 16 CU7010598KRA Cash Flow Cash Flow Cookbook *Cash is defined as cash plus marketable securities minus shortterm notes **I/S = ine statement, SCF = statement of cash flows, B/S = balance sheet + +/ +/ +/ = 1. Profit before interest and tax (PBIT) 2. Depreciation 3. Other noncash expenses/ine 4. Decrease/increase in working capital (excluding cash) 5. Taxes paid 6. Tax impact of interest ine/expense Operating cash flow Bain case teams use the following cash flow cookbook: = 7. Capital expenditures Investing cash flow +/ +/ +/ +/ +/ = 8. Interest ine/expense 9. Tax impact of interest expense/ine 10. Increase/decrease in longterm debt 11. Increase in outstanding stocks/shares 12. Dividends 13. Changes in other accounts Financing cash flow 14. Reconcile with change in cash* from Balance Sheet Net cash flow Source** I/S SCF, B/S and Notes Notes B/S I/S, B/S I/S SCF, B/S and Notes I/S I/S B/S B/S SCF, B/S, and Notes B/S, I/S B/S bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 17 CU7010598KRA Cash Flow Agenda ?The importance of cash flow ?Types of cash flow ?Applications ?Cash flow steps ?Exercise ?Key takeaways bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 18 CU7010598KRA Cash Flow Exercise Background (p. 1) *This exercise is based on The Gillette Company’s financial statements in 1996. Since several modifications have been made to the financial statements, the information provided hereafter should not be used to analyze Gillette’s financial performance. ?Net Sales ?Cost of Sales ?Gross Profit ?SGamp。A ?Profit from Operations ?Interest Expense ?Ine before taxes ?Ine Taxes ?Net Ine 1996 $9, ($3,) $6, ($4,) $1, ($) $1, ($) $ Ine Statement: The New England Razor Company* Use the following data to calculate the cash flow for The New England Razor Company: bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 19 CU7010598KRA Cash Flow *Deferred taxes can be a liability account, an asset account, or both (as is the case here). Assets Current Assets ?Cash ?Marketable securities ?Receivables ?Inventories ?Deferred ine taxes* ?Prepaid expenses Total Current Assets Property, Plant amp。 Equipment Liabilities and Stockholders’ Equity Current Liabilities ?Loans payable ?Current portion of LongTerm debt ?Accounts payable and accrued expenses ?Ine taxes payable Total Current Liabilities LongTerm Debt Deferred Ine Taxes* Other LongTerm Liabilities Dividends Payable Stockholders’ Equity ?Common stock ?Additional Paidin Capital ?Retained Earnings ?Treasury stock Total Stockholder’s Equity $ $ $2, $1, $ $ $4, $5, $9, $ $ $1, $ $2, $1, $ $ $ $ $ $4, ($1,) $4, 1995 $ $ $2, $1, $ $ $4, $4, $8, $ $ $1, $ $2, $1, $ $ $ $ $ $3, ($1,) $3, $9, $8, Balance Sheet December 31, 1996 and 1995 (in $MM) 1996 Exercise Background (p. 2) bc BOS Copyright169。 1998 Bain amp。 Company, Inc. 20 CU7010598KRA Cash Flow ?Property, Plant and Equipment ?Less accumulated depreciation ?Net Property, Plant, and Equipment 1996 (in $MM) $7, $2, $5, 1995 (in $MM) $6, $2, $4, Note 1: Property, Plant and Equipment Note 2: Dividends The pany declared dividends of $ in 1996 Note 3: Sale of assets A loss of $22MM was incurred on equipment sold during the year The equipment had an