Financial Statements Cash Flow and Taxes参考.ppt

More Tax Issues Tax Loss Carry-Back and Carry-Forward – since corporate incomes can fluctuate widely, the Tax Code allows firms to carry losses back to offset profits in previous years or forward to offset profits in the future. Capital gains – defined as the profits from the sale of assets not normally transacted in the normal course of business, capital gains for individuals are generally taxed as ordinary income if held for a year or less, and at the capital gains rate if held for more than a year. Corporations face somewhat different rules. 3-* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. ? 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied, or duplicated, or posted to a publicly accessible website, in whole or in part. Financial Statements, Cash Flow, and Taxes Key Financial Statements Balance Sheet Income Statement Statement of Cash Flows Statement of Stockholders’ Equity Free Cash Flow Federal Tax System Chapter 3 3-* The Annual Report Balance sheet – provides a snapshot of a firm’s financial position at one point in time. Income statement – summarizes a firm’s revenues and expenses over a given period of time. Statement of cash flows – reports the impact of a firm’s activities on cash flows over a given period of time. Statement of stockholders’ equity – shows how much of the firm’s earnings were retained, rather than paid out as dividends. 3-* Overview of D’Leon Inc. Snack food company that underwent major expansion in 2011. So far, expansion results have been unsatisfactory. Company’s cash position is weak. Suppliers are being paid late. Bank has threatened to cut off credit. Board of Directors has ordered that chang