Flashcards in FINANCIAL ANALYSIS II Deck (30):

1

## DuPont (original)

### ROE = (net profit margin)*(asset turnover)*(leverage ratio)

2

## Net profit margin

### net income / revenue

3

## Asset turnover

### revenue / average total assets

4

## Leverage ratio

### total assets / shareholder's equity

5

## DuPont (extended)

### (net income / EBT) * (EBT/EBIT) * (EBIT/revenue) * (revenue / total assets) * (total assets / total equity)

6

## Basic EPS

### (net income - preferred dividends) / weighted average common stock outstanding

7

## Diluted EPS numerator

### (net income - preferred dividends) + convertible preferred dividends + (convertible debt interest * (1-tax rate))

8

## Diluted EPS denominator

### Weighted average shares + shares from conversion + shares from issuable stock options

9

## Coefficient of variation of sales

### standard deviation of sales / average sales

10

## Coefficient of variation operating income

### standard deviation of operating income / average operating income

11

## Coefficient of variation of net income

### standard deviation of net income / average net income

12

## Ending inventor

### beginning inventory + purchases - COGS

13

## DDB depreciation

### (2/useful life) * (cost - accumulated depreciation)

14

## Straight-line depreciation

### (cost - salvage value) / useful life

15

## Income tax expense

### taxes payable + change in deferred tax liability - change in deferred tax asset

16

## Interest expense

### (market rate at issue) * balance sheet liability at beginning of period

17

## Cash flow to revenue (P)

### CFO / net revenue

18

## Cash return on assets (P)

### CFO / average total assets

19

## Cash return on equity (P)

### CFO / average total equity

20

## Cash-to-income (P)

### CFO / operating income

21

## Cash flow per share

### (CFO - preferred dividends) / weighted average number of common shares

22

## Debt coverage (C)

### CFO / total debt

23

## Interest coverage (C)

### EBIT / interest paid

24

## Reinvestment (C)

### CFO / cash paid for long-term assets

25

## Debt payment (C)

### CFO / cash long-term debt repayment

26

## Dividend payment (C)

### CFO / dividends paid

27

## Investing and financing (C)

### CFO / cash outflows from investing and financing

28

## Sustainable growth rate

### ROE * retention rate

29

## Retention rate

### 1 - dividend payout ratio

30