The fbse : an Application

Click here to see the source of data

Balance Sheets of Starworld Group End of Year   2020 2021 2022 Cash 60 85 112 Accounts Receivable 232 278 362 Inventory 97 116 151 Prepaid expenses 35 20 55 Property & Equipment 2 104 2 469 2 639 Total of Assets 2 528 2 968 3 319 Bank payable 126 179 383 Accounts Payable 116 139 181 Accruals 36 45 55 Long-Term Debt 1 050 1 100 1 050 Common Stock 900 1 100 1 100 Retained Earnings 300 405 550 Total Liabilities & Owners' Equity 2 528 2 968 3 319

WC - WCR = NCP

Decisions 2020 2021 2022 WC Strategic decisions + 146 + 136 + 61 WCR Operating decisions + 212 + 230 + 332 NCP Strategic & Operating decisions -66 -94 -271

Variation of WC - Variation of WCR = Variation of NCP

Decisions 2021 2022 Variation in WC (SCFP) Strategic decisions -10 -75 Variation in WCR Operations decisions + 18 + 102 Variation in NCP (SCF) Strategic & Operations decisions - 28 - 177

The content of NCP and its variations

2020 2021 2022 Cash 60 85 112 - Bank payable -126 -179 - 383 = NCP -66 -94 -271 Variation in NCP -28 -177

Sources :

Understanding Financial Statements, 1999, Marc Bertonèche, Ph. D. in Finance from the Northwestern University, Professor at the Bordeaux University and at Sciences-PO Paris, Visiting Professor at Harvard Business School and Oxford University.

Interpreting and using Financial Statements, 1999, Marc Bertonèche, Ph. D. in Finance from the Northwestern University, Professor at the Bordeaux University and at Sciences-PO Paris, Visiting Professor at Harvard Business School and Oxford University

Corporate Finance Course, Bernard Jaquier, Professor in Economics & Finance, Lausanne, 2023