C 1Corporate Finance addresses the following three questions:1.What long-term investments should the firm choose? Capital Budgeting(资本预算)2.How should the firm raise funds for the selected investments? Capital Structure(资本结构)3.How should short-term assets be managed and financed? Working Capital Management(营运资本)Capital Budgeting: The process of planning and managing a firm’s long-term investments is called capital budgeting.Capital Structure: A firm’s capital structure (or financial structure) is the specific mixture of long-term debt and equity the firm uses to finance its operations.Working Capital Management: The term working capital refers to firm’s short-tern assets and its short-term liabilities. Managing the firm’s working capital is a day-to-day activity that ensures that the firm has sufficient resources to continue its operations and avoid costly interruptions.Sole Proprietorship: A sole proprietorship is a business owned by one person. The owner can keep all the profit. However, he has unlimited liability for business debts.Partnership: A partnership is similar to a proprietorship, except that there are two or more owners.General Partnership: All the partners share in gains or losses, and all have unlimited liability for all partnership debts, not just some particular share. Limited Partnership: One or more general partners will run the business and have unlimited liability, but there will be one or more limited partners who will not actively participate in the business.Primary disadvantages: 1.unlimited liability for business debt on the part of the owners 2.limited life of the business 3.difficulty of transferring ownership Corporation: A corporation is a legal person separate and distinct from its owners. Disadvantages: Double taxation, separation of ownership and control rights. The goal of financial management is to maximize the current value per share of the existing stock.A more general goal：Maximize the market value of the existing owner’s equity. Agency relationship：Principal hires an agent to represent his/her interest Agency problem：Separation of ownership and control rights, Conflict of interest between principal and agent.Agency costs：refers to the costs of the conflict of interest between stockholders and management.C2Goal: cash is kingThe goal of financial management：is to maximize the market value of the stock The balance sheet equation (Balance sheet identity)Assets = liabilities + shareholder’s equityThe value of liabilities and shareholder’s equity= current liabilities + long term debt + shareholder’s equityNet working capital净营运资本=Current assets – current liabilitiesLiquidity流动性: refers to the speed and ease which an asset can be converted to cash.the more liquid business is, the less likely it is to experience financial distress. Debt versus Equity（负债与权益）: Shareholders’ equity= Assets - Liabilities Market value VS book valueBook value账面价值：under Generally Accepted Accounting Principles（公认会计原则GAAP），audited financial statements generally show assets at historical cost。

historical cost历史成本：assets carried on the booksMV: what the asset could sold forBV: what the firm paid for them异同：1. For current assets, short-term debt, many debt, market value and book value might be somewhat similar because current assets are brought and converted into cash overa relatively short span of time;2. For fixed assets, it would be purely a coincidence if the actual market value of an asset (what the asset could be sold for) were equal to its book value3. Many of the most valuable assets that a firm have-good management , a good reputation , talented employees-don’t appeared on the balance sheet at all.4. For both of them, assets= debt + equityCorporate finance is interested in the market value of the firmFinancial leverage e财务杠杆：the use of debt in a firm’s capital structure. the more debt a firm has (as a percentage of assets ), the greater is its degree of financial leverageThe income statement (利润表): measures performance over some period of time The income statement equation: Revenues收益– Expenses = IncomeGAPP and the income statement:1.the realization/general principle(实现/一般原则): revenue is recognized at the time of sale, which need not be the same as the time of collection (accrues权责发生制)2.the matching principle配比原则: expenses shown on the income statement are based on the matching principle3.the figure shown on the income statement may not be at all representative of the actual cash inflows and outflows that occurred during a particular period. Noncash items(非现金项目)1.A primary reason that accounting income differs from cash flow is that an income statement contains noncash items.2.Depreciation折旧 is one of the most important example.Time and costs：1.To financial managers: costs are divided into fixed costs and variable costs2.To the accountants: costs are divided into production costs（产品成本）and periodcosts(期间成本)(EPS)Earnings per share每股盈余= Net income/Total shares outstanding (发行在外的股数)Dividends per share每股股利= Total dividends/Total shares outstanding TAXES:Average tax rate平均税率: tax bill divided by taxable income （税额除以应税所得额）Marginal tax rate边际税率(relevant for most financial decisions): the rate of extra tax u would pay if u earned one more dollar多赚￥1 所应支付的税CASH FLOW现金流量(free cash flow)：the difference between the number of dollars that come in and went outCalculating cash flow:特征CF from assets来自资产的现金流= CF to creditors + CF to stockholdersCF(A) = CF(B) + CF(S)CF from assets = operating CF- net capital spending –change in NWCOperating CF经营现金流量: results from the firm’s day-to-day activities of producing and sellingCapital spending资本性支出: money spent on fixed assets- $ received from the sale of itChange in net working capital净营运资本变动: the net change in current assets relative to current liabilities for the period being examined and represents the amount spent on net working capitalOperating CF（经营现金流）=EBIT +Depreciation –TaxNet capital spending = ending net fixed assets –beginning net fixed assets+ depreciationChange in NWC= Ending NWC-Beginning NWCCF to creditors债权人=interest paid –net new borrowing 利息支出-新的借款净额CF to stockholder s= dividend paid –net equity raised 派发的股利-新筹集的净权益C3sources of cash(现金来源): Activities that bring in cashuses of cash（现金运用）：Activities that involve spending cashthe statement of Cash Flow 现金流量表：there is some flexibility in summarizing the sources and uses of cash in the form of a financial statement, the result is called.Common-size statements 同比报表: a useful way of standardizing financial statements（财务报表） is to express each item on the balance sheet as a percentage of assets and to express each item on the income statement(利润表) as a percentage of sales.Common-base year financial statements: trend analysis同基年度财务报表： a useful way of standardizing financial statements in this case is to choose a base year and then express each item relative to the base amount.一、Short-term solvency/liquidity ratios短期偿债能力/流动性比率：1．Current ratio流动比率=current assets /current liabilities2. 速动比率/酸性比率The Quick (acid-test ratio) =（current assets –inventory存货）/current liabilities 3. Cash ratio现金比率= cash/ current liabilities4．NWC to total assets净营运资本对资产总额的比率=net working capital/total assets5．Interval measure间隔时间指标= current assets/ average daily operating costs二、Long-term solvency/financial leverage ratios长期偿债能力/财务杠杆比率：1.Total debt ratio资产负债率=(total assets –total equity)/total assets2.Debt-equity ratio负债权益率=total debt/total equity3.Equity multiplier权益乘数= total assets/ total equity4.Long-term debt ratio长期负债率=Long-term debt/(long-term debt + total equity)5.利息保障倍数比率(衡量公司兑现其利息义务的能力)（也叫interest coverage ratio利息保障倍数比率（TIE）Times interest earned ratio=EBIT/ interest6.Cash coverage ratio现金偿债比率=EBITD/interest=（EBIT + depreciation）/interest （Ps. EBDIT 折扣前息税前盈余，计量企业从经营活动中产生现金的能力的指标，计量可用以应付筹资义务的现金）三、Asset management or turnover ratios资产周转比率1.存货周转率Inventory turnover =销售商品成本/存货= cost of goods sold/inventory(average)存货周转天数Days’ sales in inventory =365 days /inventory turnover2. 应收账款周转率Receivable turnover= sales /accounts receivable应收账款(average)应收账款周转天数Days’sales in receivable（ACP：平均回收期）=365 days /receivables turnover（收回赊账销售收入的时间）3.资产周转率 asset turnover ratios净营运资本周转率NWC Turnover=sales /NWC固定资产周转率Fixed asset turnove r =sales/net fixed assets总资产周转率Total asset turnover =sales /total assets4.Profitability ratios获利能力计量指标Profit margin销售净利润率=net income/sales=净利润/销售收入(计量经营效率) （ROA）资产报酬率Return on assets = net income/total assets(ROE) 权益报酬率Return on equity= net income/total equity转化：ROE= ROA* Equity multiplier= ROA* (1+ debt-equity ratio)5.Market value measures市场价值计量指标①市盈率(市价-盈余比率)(PE ratio)Price-earnings ratio= price per share /earnings per share（每股价格/每股收益EPS）②市销率Price-sales ratio= price per share /sales per share③市净/账率(市价-账面价值比率)Market-to-book ratio=market value per share /book value per shareBook value per share =equity/ shares outstandingThe Du Pont Identity(杜邦恒等式)ROE=profit margin* Total asset turnover * Equity multiplier①利润边际（率） * ②总资产周转率 * ③权益指数等式说明Roe is affected by three things:○1 operating efficiency 经营效率（用利润率来计量）○2 asset use efficiency资产使用效率○3 financial leverage财务杠杆C4Discounted cash flow (DCF) valuation:贴现现金流量估价calculating the present value of a future cash flow to determine its worth today.Discount rate:贴现率 use to discount a future cash flow (是指将未来支付改变为现值所使用的利率)future value factor FVIF（i%，n）利息终值系数(1+r)^tPV=FV×PVIF(r,t)C5Annuities:年金 constant cash flow that occur for some fixed number of periods Ordinary annuity:普通年金a series of constant or level cash flows that occur at the end of each period for..Annuity due:期初应付年金 occur at the beginningPerpetuities:永续年金the level stream of cash flow continues forever普通年金现值PV=C×{1-[1/(1+r)^t]/r}终值FV=C×[(1+r)^t-1]/r p161永续年金现值 PV=C/r（优先股）Annual percentage rate(ARP):年百分率it is equal to the interest rate per period multiplied by the number of periods in a year一年中每期的利率乘以复利期数Effective annual rate(EAR):实际年利率 it is actually the rate that you will earn EAR=[(1+APR/m)]^m-1 P164Loan types:P ure discount loans:纯贴现贷款 the borrow receives money today and repays a single lump sum at some time in the futureInterest-only loans:仅付息贷款to pay interest each period and to repay the entire principal at some time in the futureAmortized loans:分期偿还贷款 to repay parts of the principal over time等本还息amortization with equal principal payments 每年本金清偿额相等等额还款 amortization with equal payments 每年总支付额相等Partial amortization: 部分分期偿还贷款（每个月所付的钱并不能完全还清贷款，最后需要支付一笔更高的金额）C6Bond: Securities issued by corporations may be classical roughly as equity securities and debts securities. Debt securities means the issuer borrows money. differences between debt and equity:1. Debt is not an ownership interest in the form .Creditors generally do not have voting power.2. The payment of interest on debt is considered as cost of doing business and is fully tax deductible. Dividends paid to stockholders are not tax deductible.3. Unpaid debt is liability of the firm. If it is not paid, the corporation can go into bankruptcy. This possibility does not arise when equity is issued.Bond features:票面利息Coupons: regular interest payments that the issuer promises to make债券的面值Face or par value: the amount that will be repaid at the end of the loan.票面利率Coupon rate: The annual coupon divided by the face value到期期限Maturity: the number of years until the face value is paid到期收益率Yield to maturity (YTM): interest rate in the market on a bond Bond value= C×[1-1/(1+r)t] /r +F/(1+r)t 194到期收益率<票面利率，投资者愿意额外多付出一部分价款，以得到额外的票面利息2. YTM = Coupon rate， par bond3. YTM > Coupon rate， discount bondcurrent yield当期收益率= Annual coupon/ it priceyield to maturity到期收益率: the average rate of return that will be earned on a bond if it is bought now and held until maturity.realized yield实现报酬率:YTM equals the rate of return realized over the life of the bond if all coupons are reinvested at an interest rate equal to the bond’s YTM实现报酬率PN/PO =(1+R)(1+R)…(1+R) =（1+R）^n 即，R=（PN/PO –1）^1/n 这个是ppt上的，书上我没看到。