15.535  Business Analysis Using Financial Statements

Hi Class,

Due to a last minute schedule change, I will be cancelling my office hours tomorrow 12/4 from 3p-4p. If you were planning to stop by tomorrow during my office hours, please email me and we can figure out another time to meet during the day or on Friday.

Best Regards
Gautam

Hi class,

I will be returning Quiz 2 on Monday. I will spend the first half of the class discussing Quiz 2 and the second half discussing Chapter 17. In Chapter 17, I will talk about how management can manipulate accounting numbers to give "misleading" information to users of financial statements.

For those of you who are unable to attend the class next Monday, I will return Quiz 2 to you on Dec 10, when you present your business valuation project.

Thanks, Jeff

Hi class,

I believe that one of you forgot to hand in Quiz 2. The number of students who took the quiz and the number of copies I have do not tie. Please let me know if you are the one.

Thanks, Jeff

Hi class,

Some of you are still confused about why we add the tax benefit to reported tax to get tax related to operating income. Here is the explanation:

We add the tax benefit to get ONLY the part of the tax that belongs to operating income. Think of the reported tax as being: reported tax = tax expense related to operating income + tax expense related to net financial income. If there is net financial expense (as opposed to net financial income), then reported tax = tax related to operating income - tax benefit related to net financial expense. To get only the tax related to operating income, you simply do the following: tax related to operating income = reported tax + tax benefit related to net financial expense.

Thanks, Jeff

Hi class,

Some of you asked me how to explain the operating expense of $3,204 in the reforumated income statement for E15.12 (see solution for part 1c). I have uploaded MS Word document on Stellar to show you how the reported income statement for E15.12 would have looked like. The working to get $3,204 is shown in this document.

Thanks, Jeff