Uploaded February 2025 | Updated September 2026, 1 week ago

---

We continued our discussion of earnings and cash flows, starting with an examination of why accountants treat capital expenses as operating expenses (R&D is a prime example), and how to counter that effect We then dealt with some final issues on earnings, including the tax rate to use in computing after-tax cash flows and dealing with money losing companies. In the process, we did look at what to do about accounting fraud, and while the answer is not much, there may be a role for forensic accounting. We then moved on to examine broad questions about what to include in capital expenditures and working capital.
Start of the class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/tests/cftests2.pdf
Slides: nyu.box.com/s/78d95svdz3v0rbkvm2457sxdex2j1viw
Post class test: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session9Btest.pdf
Post class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/eqnotes/postclass/session9Bsoln.pdf