Waiting for answer This question has not been answered yet. You can hire a professional tutor to get the answer.
1.Why the so-called "fair value" of financial asset is represented by the present value of future cash flows of financial asset?
1.Why the so-called “fair value” of financial asset is represented by the present value of future cash flows of financial asset?
2.Provide the common size statements for both Balance Sheet and Income Statement. What kind of noticeable pattern you may identify for the firm? Is this usual for the airline industry?
Balance Sheet (in millions)
2012 2013 2014
Assets
Cash 30 10 475
Marketable securities 150 100 0
Accounts Receivable 920 1150 800
Inventory 760 278 450
Plant, Building, and Equipment’s (net) 1872 1905 1109
Investments in affiliates 0 30 329
Total Assets 3732 3473 3163
Liabilities
Short-term debts 607 9 30
Advances from customers 111 34 34
Accounts payable 685 192 773
Interest payable 75 98 62
Tax payable 127 147 128
Other Accrued Expenses 20 15 35
Bonds payable 925 486 650
Stockholders' Equity
Common stock 1021 2258 1175
Additional paid-in capital 74 156 147
Retained earning 87 78 129
Total liabilities and equities 3732 3473 3163
Income Statement(in millions)
2012 2013 2014
Net Sales 3296 3418 3983
Cost of Goods Sold 2215 1809 2410
Selling and General Expenses 700 812 759
Depreciation Expense 260 298 284
Interest Expense 90 109 121
Income Tax Expense 295 137 254
Net Income (264) 253 155