Formulas 1 Flashcards

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1
Q

Annual Percentage Return (APR)

A

Effective Interest Rate * # of periods in year

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2
Q

Asset Turnover

A

Sales / Total Assets

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3
Q

Breakeven Point - Units

A

Fixed Costs / Contribution Margin

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4
Q

Breakeven Point - Dollars

A

Fixed Costs / Contribution Margin Ratio

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5
Q

Current Ratio

A

Current Assets / Current Liabilities

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6
Q

Contribution Margin

A

Revenue - Variable Costs
or
Sales - Variable Costs

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7
Q

Cost of Goods Sold

A

Beg. Inv + Inv Purchases - End Inv

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8
Q

Dividend Payout Ratio

A

cash dividend per share / earnings per share

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9
Q

Effective Interest Rate

A

(principleratetime) / principle

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10
Q

Gross Margin

A

Revenue - CGS (or gross profit)

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11
Q

Inventory Conversion Period

A

Average Inventory / Cost of sales per day

Avg Inv = (Beg Inv + End Inv) / 2

*Make sure to use 365 days per year unless stated otherwise.

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12
Q

Inventory Turnover

A

CGS / Average Inv

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13
Q

Marginal Propensity to Consume

A

Change in Spending / Change in disposable Income

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14
Q

Marginal Propensity to Save

A

Change in Savings / Change in Income

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15
Q

Number of Days Sales in Inventory

A

Days in year (360 or 365) / Inventory Turnover

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16
Q

Quick Ratio

A

Quick Assets / Current Liabilities

*Quick Assets = cash, mkt securities, A/R

17
Q

Residual Income (RI)

A

Operating Profit - Interest on Investment (or required rate of return)

18
Q

Required Return

A

NBV (equity) * hurdle rate

19
Q

Times Interest Earned Ratio

A

EBIT / interest expense

20
Q

Total Costs

A

FC + VC
or
y = mx + b, where x = variable, m = slope, b = y intercept

21
Q

Work in Process (WIP)

A

DM used + DL + Manufacturing OH

22
Q

Average Accounts Receivable

A

(Beg AR + End AR) / 2