DJIA 15843 Up at all time highs S&P 1782 Gold: 1254 1200 low back in beginning of July.

y. 1400 in September but downhill from there

Increase Interest Rate Increase in USD Decrease in Gold prices 5 yr 1.53 10 year 2.88 30 year 3.89 WTI 97.64 Brent 108.71 EV/EBITDA Multiple used in conjunction with other ratios like P/E Enterprise Value = MV of Equity + MV of Preferred Stock + Market Value of Debt Cash/Investments EBITDA = EBIT + Dep & Amortization - Low ratio could indicate undervaluation unless its a high capital intensive business - Multiple takes into account debt, so its a good multiple for finding takeover candidates - Biotech would have high multiples EV/EBITDA VS P/E When and why?

How non-cash items move through financial statement ROE vs Op Margin - Provides information about how profitable and efficient a company can be o Op Margin shows you how much revenue is left after deducting your cost of revenue o ROE shows you how much the company generates for the owners of the company NI/Shareholders Equity The higher the ROE, the better. But you have to consider debt. You can boost your ROE higher by borrowing money. And as long as the revenue you generate is more than the interest you pay on those debt, NI will increase more than equity. Nothing wrong with debt, but too much can be a problem if theres a downturn. Reinvest ROE or distribute? Net Debt = ST debt + LT debt Cash FCF = NI + Dep A/R + A/P Capex FCF = Cash flow from operations Capex Interest Coverage Ratio = EBIT/Int Exp Diluted EPS = Total Income Preferred Div Payment / Weighted avg shares os + diluted shares

CF statement is the most crucial, but you need the Income Statement and Balance Sheet to do the CF statement Income Statement - How profitable is the firm. Net income - bottom line - flows to Retained Earnings on the balance sheet. Net income - bottom line - flows to first line on Cash Flow from Operations on the Cash Flow Statement *Cumulative record over a period of time Income Revenue Other Income Expense CofGS Sales, General, Admin Dep Loan Interest Taxes

Statement of RE - Portion of NI not paid out to investors as dividends Retained earning - Net income taken from Income Statement to calculate ending Retained Earning. Also states dividends paid out if any to get to ending RE. *Explains change in RE account and in dividends over a period of time. RE from prior year +NI from Income Statement -Dividends Balance Sheet - Act as a record for the firm's assets and liabilities. The rest is Shareholders Equity. Cash balance - first line under Current Assets - taken from ending cash balance on Cash Flow Statement *Snapshot of a moment in time Assets Cash Accounts Receivable Inventory Plant, Property, Equipment Less: Depreciation Liabilities Accounts Payable Loans Stockholder Equity Common Stock Retained Earnings

Cash Flow - Connects the statements together Take the net income and depreciation from income statement for use in Operating Activities Take the comparative balance sheets to create your CF statements. - Increase in assets means decrease in cash and increase in liabilities means increase in cash Ending CF is put into Cash and Cash Equivalents on Balance Sheet Op Activity - most important as it indicates how successful the business is at maintaining a positive cash flow Operating activities - day to day transactions that brings in revenues or expenses Consolidated NI Depreciation Changes in receivables, payables, liabilities, income tax, Investing activities - buy/sell long term assets to be used by the company Payments for PPE Investments and business acquisitions Financing activities - raising cash by taking out loans or bringing in more equity Change in short term borrowing Proceeds from long term debt Dividends paid Purchase of company stock Cash and Cash Equivalents at end of year