Finance ~ 4 Finavoar Maexer = Maijorm whore Stewvilitd ave ined owned tindel » Annws fev Upicent Pyice eluscovery, aliocaviny of capital , Ligniclidy, Disk mitigation ; h Predict | Hedging Ns Or Maexers 1. Natuve of Claim Debt Market , Gyity Market Matuvity of Claim : Money Mevkes, Copilat Mavked >Syy — 2 = Primary rine ; — Seeondary ming oF Delivery : Cah Mevket , Fidure Meee Over the Counter peica ony 4, Orgowazational Structure Exchomye Tyodol Ginvideys “those witty] eas User. ‘These with opportunities cee eo ’ *\ Fo convert eaah now to coh later Corporate Lire Ciuc +. Proprivorshup — Now -registeved uninerypor ate 4 individual ; Dia 4 got capita , waliniteol ability — Not Liable +o Corporate Hox only personal income tax 2. Postuerslup — Geveyal & Limittol Partners “Teen : Coon Ine perconal asters, Couboliing Stale Limited - Lets Dimited to invatmest , no comtyslling Stako 3. Coxporotion: Roce capitrl ersily , IPD ; Mg = Vunkraded Lf, cosy Hawafa of owners hip a business pwreel by own eg al entity alictinct from otrere — Possibte clowele Faxatioy WHAT DETERMINES CORP ORATE'S VALUE? = Ability Jo generate Cah flows pacino nya sate Wen = Fer» FCG) a CBee Ta WACe Op wace)* (1a wace) = Rwewat — costs & toeen — Reg. investment gy) FOF = Sale Kwel Op. cost hs t ed aad wace — Cost of Debt + Fvwe tb} - tanity Mkt. Inder tad rated te oe oe Gi a Cost of Equity . Fivma brains visk ; ME. TISk avexcion “ = = == = = —dushibution fo Company 'g nVvBFOVS Fer is avallalle on (fyee oun) WACe, hare * Compry A whee MO Expecte’ TENTH! Tate | Debt, Epuany, Prefered J x wre = wa kalo vptp 4 Wee \ } } aagee fim fvough > id pet ef lel 3 Moly rd P Erowple Debt - 80m 2» 20m = Iodm Ka = 87 kp = l0/. ue ois top) WAC = & HOCK OF 4 9D yO.t 4 100 y OE 200 20 200 ce i = ay. > s (0.47. ) J Accowmtivo, Pott - Revie — Core Erevewe Prefit — Opor-twmuty cost BoAgency costs Fk Confit hon wemngus work fo Po» Cott incurred by thor eNol lex ) DECISIONS — CORPORATIONS MAKE 4. [wvwtmeurt Decitions — Algo called capiter budgeny , of frm (su up manufac fas) y thy Own inbuette not shorvehololes purchase of Veal mers, Pivg term View 2. Fineming Decitions - Sale/pwroves of macs (finemeras) 4 Yarse | howelle Mmovoy ; oneel oblivg AM OF SHOCK hslolece (raise eyyaty , pay, debt Ge. FR mows NA for BB Cine fo Fe in Tove ausivek adnon on Pam (pe yore tatty orn eed Seas invead) Witmer Spl e 1.2m ih malv chicments Ginvu) |. Divisltmd Decisions - Payowe oecisian deate separately tron Teed fioun, FINANCIAL | PEBIT MenMre SHugth 9 4 + Camot mansputare props » Wo — feat Aanapacny at CF Jo know alouk Compamty'e. finendex | FRee (ASA FLOW (rer) thor pon Cash exp ble [08 on tale of puaeas, Deferved fax Own bE incladed. Corr = Nopat + New cagh expeme /Depreciafmy — CAPEx — Chornge im (odd ee onse Mow - cast exp: NWe Sty 4. NopaT = eBIT x(1- Tay) | Step 2: Uper, WO = Op. Cua ncseis — Op. Lunn. Limbilthey Shep 3: That, ante Oper. Cope = Net spar we + Ou long term aarote Shop 4: Torat ows ope. Copii Cts year — Tage year) = Nub invut. im Opel. Capital 2 6 fe . 4 Oh \ntereat (Ses FOR = norar Nu inyesh im tpeds Capital wae Rg of GPA. cmpibed Oper CA —> Coal Ale a Invi (pe Shove tom > ieelous Cet Ay) pease mapnnnnnnnnngovnovagag: Merona (*Worng CAPITAL PLANNING $e = How mmch We auedocl? From where it shout be finomced? Totat Ctorvent OU&els Nuewe CA CL Gres Wwe Nowe. Optrating cn - Operating CL — [x shea —fermn eeeveritd notes poy able} ie, Ivtwioy , Alp, Acornnle J Dali Gmation Roe NPM x Ascel Tvornnven x Cywity Mutrpliey > Ralnved Pliny High fetal aatere —> Cows Re > kesicled Pohey low otal mses ——> High Rot Meer araeelicy 5 Maximize Jong tum Roe a x Woy permansat , 1 Umpoveux Operting CA are Finownedt 16 ca tlect TP fiven's pperating CA Finencing policy = A Module | Matinity Mareming Aiprencl Criinng et fnemeing, tee —= Bhovt team Debt —> Temperasy CA ery mywnsant on Ln vik nan tchs = (ong Him bubt —> Fivel sees r Yiva Cue 2 8 Qtatively Apgrusive Apprroccls a KShovter cco prefered on it enarcrer Raywolity fer firm owl Avoidt Shey term covet yertwat 7Clated probleme , ower imterut charg A, x Ipruntory Corversion Period (rep) + Aumgth of time betwen Pwr chasing Mat fiown Gupplies & Vecorvding Cale +o couwmers >» Priynioles Deforet Period (PDP) > Avucnge Collectign Purind (Ach). 1c? = mes Acr|3S0 = Rycuivnbie PDP = _Paaotes Ces Jay Sales [345 Daly purchases oe = ICP + pso/ace) — Pop (Coge eo ‘ CES SS CSCC E OTOH HD| qprere Goasnice INVENTORY MANAGEMENT | Grats Inventory recetecr $0 Susi €peA Inventory honey: Shwe Bow roy His 7hvertery Solel Aurig pened Toiat COGS (7 ty. Harnov a clos moet Avg. Inveaiony meas ow swe. choriage wony occur ) Recewastes MnnwaGement Gudit Peniod = Pero duviug which Custonar pays Cot 22) Coat Diseoauk + 16 purenarer pays I Cath bifer trek of Aucceut peried ! sa penoen ah salen price ( 2[10 mer 80) |per Ava’ + fipannciot chregth of Customer —> claxihy Aging Scheele: ? Break qlown of frms aeceivable by age OF aceon. inte S/abo Necewng & Accniunins PAYABLES Acces —> Umpad toxt +g ( sheet - 400" H) Accoum’ payable > Trade Cred [Argut H — Expmmdiny Saket © Cugtinaug oredr jericd guactatee Aeidizinnat | dummuut of fiauanciiny Via ‘tackle cre Lit “Ay purchase of 2000/ day wi & —~ ow Loe oo +0 suppers | IE gages stouble -r owed 120006 (additiovat Fu fi nmncig) Home = 49 —rowu 40000 (dd. 2b firemcitag) Gist of Tne Creda | fee ayig wee ao Lge pace =e 42 Gate pried 82 tance acing | cost of _ Cast fperind © Ne. of puinola | year ortdit Diceouat perantage HS SDN O vit POON! ae } -e ssiaeng spt foo — Diccovmb 7 Daye veal 6 Dike Wraith ore iste 9 — period | a Me tf esmpommeud peti -. Effective Anwnal [4 5 Abminat:_litech fate eens | Rake | Fore conpevwrded inkeovat | A eS = e& & & & = - & & S & & & a & € € « € € « « ‘ ( ( ( fGags Baneel Rare for tog eat Rott sy ew Cet) » Prime Rave bm Sched et compounding 0” invulment Fpertive asmat ate y= (4 2 Comdwuous taumpowncing —» wy = ev -4 xlirwirg Pevpetaty == =o = 2 = = a = = 3 ° I) J = 2 > } 5 5 5 ) } t veel worling EPI Prome co = Cammercint Pape? Whi privete tor Time Vase OF Mente (Cer) = 108 > Folaue veloe “ Pred vale Fes umuvur Seritt, Ay [Crut) + Ap | Cae? # teh m > wo. of + _Newonal A S) _L cee EAR ww) Conk comp : Fv fy tyeen © PV (1% EAR) = Pv[eT) = For b yema , EV = PY(e%) > Giver ama FV, EAR Peeper) % Caustomt Strawn of idemsicat cath flog with 7 evd PY ef purpetuy = Mears ah Diteo wnt vate (v) PV of growing puperuky = New Preset: Val ae \ Froke 4. Aygitdy CEVIERY jnovieunat rina vit inn meuol of mMDKLY « Ci a -wentes) evi +") tevied FN» \ Py = (Ad [U4 | 4 Factor (evr) 4 flr) DE + Am (1409" 4 periods mmcreseconcl > Comtwmrously ous e218 =r Fev = 127. , EAR = 12-74). h_flov (prwin Rate Grows by cont [ griwhy “yete cam Baie = Ann miry 4 2 i We Canotont Shrvemm of Jduatical au) Powe {ot Papel a Cah func comes iy at ineyeee Ines TR ee Ex. Zivoo olepesiech each Yea TOO iS cal aide 4 toongkviy® = eee CLL ear rR? fuerte Vaal Wheres Ax 1 Factory op Annuity Cewea) FIFA vertAmoRT1ZA110N ata ular payment ig ard 4 Poy julenesd 0” oe mmol of loam (ne lan Pot of Part os wied to ve tu Qrewiag ANA TY » Ay grewing al mate g% antiy yore Nat nig, folly Art: (4) iy ant Nv aa ie 14g b lip [ ce Tre Bown Marner Type = Shreaght Tasn Vanilla) , Zero Cron, Fraing Rate , Options ( Commun be, Calnble, Pritable) + lncomse ; Indexcol nce Value of Bond Ams paick ty bondholde at moaturtty date Conpon Peywrnt Awurtal interest rete padol on bono expreliedt RA % of free Vetus 4 paiol from iccue dlate wil ona turity . Gtosght Bad - ys fired pervik coupon #ver fe vertin Pow ‘net Ne hitered payrueut 1h bapween Feat, cstel at oluscomnt Vb 2 Zea Coupon BoNd VALUATION > Throling of Aisceumr pri c face Value , a+ preminnr free vaene — price > Divty Price of Boud = Cleaw Price + Accrutol Insevest ] > Iniuvtet are = Covpnn vate => Price = Face Vabue = Gurrmat ida (Yivlel Raed: #V=leo , Silivg @ fo, 127 tenpen Fade Sash (Gervow Sieg = Ceupen cual tallow 7 Marlee price) = 2/30 x0 = 16:7 Fox Suling @ 120 | ewanuh yield = 127 joo x90 = Toy (ell @ promum) x Guru Yield > Conporr Rate Whom bond culling at liceoumt Viet - Visa Bora pues @iscemmtta HN Eorvunt yild = Macket nttyiel ate - = Yieup To MATURITY (Rutwn te Hntwvity) Shirn from bowa if (eps Hil cinndvit? Joo® { Retwn ] year) a ce of cha inflows from bow = Cash Oudflowns for earns 4 Siee YON = cloud yOd lg fur — ITM \ (nvucted) | Return p = Nika CURVE Yh uted = a ean Cuommat) Stinking fy Sefedy Inverxrod a Yiwd Oo at hoes SeuCee Rie Id Boninc > Sp, wecly's give Vil nding Jmievrect vet. mick Drrntian, —> ‘Thnt Rupvestwoof Aare Kish lb tate Jo vecevec inveetaenct with cua flows Stok VALATION » Common Sroce % Varunlion by Comporrabler Comanvial ‘ravastiples) 4. Mayksh #0 Tritt _pery chive broke Vala Bap. vale per shart 2 Wier le Price a, Net Income See tt tormvye = Neo} suvut Tokio Eanes. Sock Price & Divide Approach 1. Expect vet = 7 DIV. +P A] expected vel cost of capitate Dividewa Discoumt Moot finsyrre. evicted prugyen ht dus of iin ¥ — > Dida +9 Dividy wan (x) = Di curios yl Crow, iW Din tande C4) Aik & Return BD Frrifetw - Covlech on of DB Gxpucied Teun = > P Rick = Vowianen in vee a Eleruns —> Grup t (Gi turae footers? a Un cemsvon ae Conbrolla bie GYttimatc Risk Wert ome Hi vue eeeeeSTsVTISTITITTIIIGIGCGKIIT III IbS Pin enciat vated S Grieap tC Mernat five SauZig a Rerwen Bp emits) eget veh Syston alte (baer 1 Povifolie Peden inet), Urrayed om ale 2 Elomants of Risk » Neviation in Tear 5 Tolar Rick - Systematic 4 Cray tomar’ Cid eenat Rak eatatated wilh variation 2 Semaatel olevia to lo Zick primum - Eypteted Ritiern Risk fee premawna (E) ea Tort Rick elven) - Re] cuttin Rete k ALA 4+ %2 Re + Ps fen ee 1X) + DHT: Gr Geach our = (OSRRE HEHE cal a jane: Gqurd Bick? - 057A BU OSHE/ ateneete) i ae Conte) © Cole) pe Fey = OD = 12 ee a ae egg x (6.96) (0:08 2a a2 w(esd< Fppun ick * 05% 9 006" ctarwelardl mea ure % Com(Hy) wed Since ie % oe Gard + Compare 2 or amore pasos of checks => Urry poreferod over vo tid Rick -[ 6, 0205 4 9 P04 Tre Peleus © Gao a s) Filta Rick, = (Tet) Rk = 48) pagan = 7 (yp 0) Bik = 3. asl elt eh ew Cig es cameo kon corvelati ig =a a Rin (sp) of portfenr 1 => btw Rick 4 law covvela tion c. Dvertifieatn of Rick + No of umyteated | wmgativdy the yick ALCrener > Podaace Wuaygtuweniic 71st by tT * # Di verification Teaducls variability Heat correlate ol hohe Ge & atects in portfolio jucyeatt, e e ce Geewribin lecet yUaled 4 enc e e e aS 1] RZ Maeno NN ie } v. In pper, + 16 Convdation blw {mantori} Fe beAtots portfolio & amavket AS wn ef = eens Neo of Pcgseimatié Hei ares T, ¥ T Risk of Sige ASE » Rea: Messuse oF Sys tematie Rick £ Ban demote thaw ish gyck i fF yr paciwde 1 in) Ybl portfolia cov (% tm) Yq Teva on sted a compared Hy market eke B Rs Buln of wwwleb = 2 Now (Tw Nim = ee ov nvalet = ——— EERiny MARKET CINE aivenifvest porifele, vngyghesnatic vith 18 bw fowdtians ef vetwont PB tq), re lodictar blvd feenvioinat'd RUUMSIAN) Bp EGLO gas as petcr amok ie Sagdematic IK, muakoanal 1 py win be Uncar S Security Marker Unt ry = ep + BLELEM Re) Crpiiat Atse+ Pricing meat Cearm) SME chyle wprnrel A whiw Re joven Finanoar SYSTEM Divect Troma fert 3 , == Une Indeed “howls Vregh invatwnt + S4 \ Lean bomnketg puter Focters phat offer Cast pene 2. Pro action Oppo wane 2. Time preterence for coma wey tion s Rise 4 Financial Inctidetio B 4 lye bowe , brekevage actiM ed D2 Depest Tnking Financial ic iilade (Nera Tings s Lenn Aoeiabinns Oredd UnioutArqu cmon a Dada Frost Wall: Ghreat Rafrrm Lirnat Honey Financiat Wcrisarvont ange ft Lwtermant Fines EMainal Fmds = Money Meal Be fryocek Fuwrols (E1P) a any - Boy . ul) | — Hedge Fmolg ss Cx €& ee & & C= Ce = & & | 4 Private Cayaty Funds |S. Life Insveremce Companies & Pensior Far [SsWANCE OF SECURITIES => Guivg public BS Valoca on eee ree tetera fox | Po | > Perdy — Mere vegulatery Coupliomce | | i} | Process OF GOING PuBLic — Sued am Invurmurt Bonk = Underwriting Synaeeate > Roocshow 2 Book - Builcling FBrrecing Hee Suywcenie — Sell romwing shaves ab lew price (wien U interat) cae IPO | Grwnstoe — Sei) addition Shaves ( whan f wterad) £ Unclirpr cing & & & & & i= e « « e ec e Cc e e € € €