Finance 201

Question 0

QR

Acid test

Answer 0

(CA-inv)/CL

Liquidity

Question 1

CR

Answer 1

CA/CL

Liquidity

Question 2

Average collection period

Answer 2

AR/Daily credit sales
AR/(credit sales/365)

Liquidy

Question 3

AR turnover

Answer 3

Credit sales/AR

Liquidity

Question 4

Inv turnover

Answer 4

COGS/inv

Liquidity

Question 5

TAT

Total asset turnover

Answer 5

S/TA

Efficiency

Question 6

FAT

Fixed asset turnover

Answer 6

S/FA

Efficiency

Question 7

OIROI

operation income return on investment

Answer 7

EBIT/TA

Efficiency

Question 8

DR

Debt ratio

Answer 8

D/A

Financing

Question 9

Debt to equity

Answer 9

D/E

Financing

Question 10

TIE

Times interest earned

Answer 10

EBIT/interest exp

Financing

Question 11

ROA

Return on assets

Answer 11

NI/A

Profitability

Question 12

ROE

Return on equity

Answer 12

NI/E

Profitability

Question 13

GM

Gross margin

Answer 13

GP/S

Gross profit/S

Profitability

Question 14

OM

Operating margin

Answer 14

EBIT/S

Profitability

Question 15

NM

Net margin

Answer 15

NI/S

Profitability

Question 16

DuPont

Answer 16

Net profit margin * asset turnover * leverage multiplier

NI/S S/A A/E

Question 17

FCFF

Free cash flow to firm

Answer 17

EBIT - cash tax + depr - CAPEX - ^NWC

Question 18

FCFE

Free cash flow to equity holder

Answer 18

NI + depr - CAPEX - ^NWC + ^net LTD

Question 19

Cash tax

Answer 19

Total tax from income statement

Question 20

CAPEX

Answer 20

Capital expenditure

Gross PPE - gross PPE (previous year)

Question 21

NWC

Answer 21

Net working capital

CA - CL

Question 22

EVA

Economic value added

Answer 22

NOPAT - [WACC * costly capital]

Question 23

NOPAT

Answer 23

EBIT - cash taxes

Question 24

WACC Weighted average cost of capital

Answer 24

E/V(Ke) + D/V(Kd)(1-t)

Question 25

Costly capital

Answer 25

All interest-bearing debt TA - AP - accruals