Class Example - PERSONAL BALANCE SHEET
ASSETS LIABILITIES
Cash $20,000 Unpaid Accounts $5,000
Investments $60,000 Student loan $20,000
Car $30,000 Car loan $30,000
Condo $500,000 Mortgage $380,000
$610,000 $435,000
EQUITY $175,000
LIABILITIES + EQUITY $610,000
BALANCE SHEET INCOME STATEMENT
2021 2022
Current Assets Total operating Revenues
Cash & Equivalents $157 $198 COGS
Accounts Receivable $270 $294 SG&A Expenses
Inventories $280 $269 Depreciation
Total Current Assets $707 $761 Operating Income
Fixed Assets: Other Income
Property, Plant & Equipment $1,274 $1,423 EBIT
Less: accumulated depreciation -460 -550 Interest Expense
Net property plant and equipment $814 $873 Pretax income
Intangible assets 221 245 Taxes (Current 15, def 9)
Total FIXED Assets $1,035 $1,118 Net Income
Dividends
TOTAL ASSETS $1,742 $1,879 Addition to retained earning
Current Liabilities
Accounts Payable $455 $490 CASH FLOW TO THE FIRM
Total Current Liabilities $455 $490 Operating Cash Flow
Long-term Liabilities Capital Spending
Deferred Taxes $104 $113 Change in working capital
Long-term Debt $458 $471 Cash flow to the firm
$562 $584
Total Liabilities $1,017 $1,074 Cash flow to bondholders
EQUITY Interest
Preferred stock $39 $39 Changes in debt
Common Stock $32 $55
Capital surplus $327 $347
Retained Earnings $347 $390 Cash flow to shareholders
Less treasury stock -$20 -$26 Dividends
Total equity $725 $805 Change in capital
Total Liabilities & Equity $1,742 $1,879
CF (B) + CF(S)
NETWORKING CAPITAL 2021 2022 CHG
Total current Assets $707 $761
Total current liabiliites $455 $490
Net working capital $252 $271 $19
EQUITY CAPITAL $378 $415 $37
INCOME STATEMENT Cash Flow Statement
Net Income $86
Total operating Revenues $2,262 Non-cash items
$1,715 Depreciation $90
SG&A Expenses $327 Deferred taxes $9
Depreciation $90 Change in working capital
Operating Income $130 Accounts Receivable -$24
Other Income $29 Inventories $11
$159 Accounts Payable $35
Interest Expense $49 CF from operations $207
Pretax income $110 CF from investing -$173
Taxes (Current 15, def 9) $24 Change in equity $37
Net Income $86 Change in debt $13
-$43 Dividends -$43
Addition to retained earnings $43 CF from financing $7
Total change in cash $41
CASH FLOW TO THE FIRM
Operating Cash Flow $234 =O9+O6-15 EBIT + DEPRECIATION - TAXES
Capital Spending -$173 =-(H13-G13+O6) -(End Net Fixed Assets - beg Net fixed assets + depreciation)
Change in working capital -$19 =-I39 -(Current Year NWC - Prior Year NWC)
Cash flow to the firm $42
Cash flow to bondholders
$49 =O10
Changes in debt -$13 =-(H22-G22) Debt repayments - debt issuances
$36
Cash flow to shareholders
$43 =-O14 Dividends are INFLOW for shareholders
Change in capital -$37 =-I41 Issuances are outflow for shareholders, buybacks are inflows
$6
CF (B) + CF(S) $42 =O32+O27
=O6
=G5-H5 LY - CY
=G6-H6 LY -CY
=H18-G18 CY - LY
=SUM(V2:V9)
=O20
=I41
=H22-G22
=O14
=SUM(V12:V14)
=V15+V11+V10
t fixed assets + depreciation)
holders, buybacks are inflows
TARGET SALARY
Bracket Income
First $51,446 $51,446
$51,446 to $55,867 $4,421
$55,867 to $90,599 $34,732
$90,599 up to $102,894 $12,295
$102,894 to $106,732 $3,838
$106,732 to $111,733 $3,268
$110,000
Total taxes payable $28,090.70
Total taxable income $110,000
AVERAGE TAX RATE 25.54%
MARGINAL TAX RATE 37.91%
$110,000
Tax rate Taxes
20.05% $10,314.92
24.15% $1,067.67
29.65% $10,298.04
31.48% $3,870.47
33.89% $1,300.70
37.91% $1,238.90
$28,090.70
On next dollar you earn
