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SBL > Finance in Planning and Decision Making - Technical Notes > Flashcards

Finance in Planning and Decision Making - Technical Notes Flashcards

1
Q

What are the 2 liquidity ratios

A

Current ratio

Quick ratio

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2
Q

How would you calculate the current ratio

A

Current assets / current liabilities

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3
Q

How would you calculate the quick ratio

A

Current Asstes - Inv / Current liabilities

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4
Q

What are the 3 profitability ratios?

A

ROCE
GP Margin
NP Margin

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5
Q

How do you calculate ROCE

A

Profit from Ops / TALCL

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6
Q

How do you calculate GP Margin

A

GP / Revenue

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7
Q

How do you calculate NP Margin

A

NP / Revenue

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8
Q

What are the 3 efficiency ratios?

A

Inventory days
Payable days
Receivable days

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9
Q

How do you calculate inventory days

A

Inventory / Cos * 365

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10
Q

How do you calculate payable days

A

Trade payables / Purchases or CoS * 365

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11
Q

How do you calculate receivable days

A

Trade rec / Sales * 365

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12
Q

What are the 5 gearing ratios?

A 
Interest coverage
Cash coverage
Gearing
Operational gearing
Financial gearing
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13
Q

How do you calculate interest coverage

A

PBIT / Interest

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14
Q

How do you calculate cash coverage

A

CBIT / Interest to be paid

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15
Q

How do you calculate gearing

A

Long term debt/ debt + equity

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16
Q

How do you calculate operational gearing? (Risk)

A

Fixed costs / total costs

17
Q

How do you calculate financial gearing?

A

MV long term debt / MV long term debt + equity

18
Q

What are the three investment appraisal ratios

A

ARR
Payback period
Discounted cashflow

19
Q

How do you calculate ARR

A

Average annual profit / Average investment * 100

20
Q

How do you calculate the payback period?

A

Discounted cashflows

21
Q

How do you calculate the discounted cashflows?

A

IRR = L + [NPVL / (NPVL + NPVH) * (H-L) ]

22
Q

What are the 4 different terms of short term finance

A

Lease
Trade credit
Loan
Overdraft

23
Q

What are the 4 different terms of long term finance

A 
Venture capital 
Lease
Debt
Equity
Strategic Alliances
Franchising
24
Q

What does suitability, acceptability and feasibility mean?

A

Suitability - it is appropriate, does it fit with strategy?
Acceptability - will stakeholders be happy, risk v return
Feasibility - Can the funds be raised?

25
Q

What is the acronym for budgeting?

A

CRIME

26
Q

What does the acronym CRIME stand for RE budgeting?

A 
Control 
Responsibility
Integration
Motivation
Evaluation

SBL (16 decks)

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