Mid term (ch. 1 - 5)

Question 1

Calculate the gross margin

Answer 1

Gross margin = sales of goods for resale - purchase cost of goods for resale

Question 2

Calculate total production

Answer 2

Production sold + changes in inventory of finished products and WIP + capitalized production

Question 3

Calculate value added

Answer 3

Gross margin + total production - external services

External services:

• cost of RM
• non-inventory supply costs
• outsourcing costs

Question 4

Calculate EBITDA

Answer 4

Value added + operating subsidies - non-income tax - personnel costs

Question 5

Calculate EBIT

Answer 5

EBITDA + other operating income - other operating expenses - DA + DA reversal

Question 6

Calculate financial income

Answer 6

Financial revenue - financial expenses

Question 7

Calculate cost of debt

Answer 7

Interests/financial debts

Question 8

Calculate profit before tax and non-recurring items

Answer 8

EBIT + financial income +/- shares of income in common

Question 9

Calculate exceptional income

Answer 9

Exceptional revenues - exceptional expenses

Question 10

Calculate net income

Answer 10

Profit before tax and non-recurring items + exceptional result - participation and profit sharing - corporate income tax

Question 11

Draw intermediate balance tree

Answer 11

Gross margin + total production

Value added

EBITDA

EBIT

(Financial income) profit before tax and non-recurring items

(Exceptional result) net income

Question 12

Calculate Capacity of self-financing (CSF)

Answer 12

Net income + DA - DA reversal + exceptional capital expenses - exceptional capital income

Question 13

Calculate Working Capital Requirement (WCR)

Answer 13

Inventories + short-term receivable - short-term payable

Question 14

Calculate durations of receivables/payables

Answer 14

Receivables = (receivables/sales incl. tax)*360

Payables = (payables/purchases incl. tax)*360

Question 15

Calculate net cash

Answer 15

Cash and cash equivalents - bank overdrafts

Question 16

Give the liquidity equation

Answer 16

WC - WCR

Question 17

Calculate ROE and RNOA

Answer 17

ROE = = IOE/E

RNOA = IOA/NOA

Question 18

Calculate interest rate

Answer 18

(Interest*(1-tax rate))/financial debts

Question 19

Calculate NOPAT

Answer 19

(NOI-I)*T

Question 20

Give the return analysis equations (ROE and RNOA)

Answer 20

ROE = k = IOA/sales * sales/NOA * (1+FD)/E

Profitability * turnover * gearing(leverage)

k = e+(e-I)*(FD/E)

RNOA = e = IOA/sales * sales/NOA

Question 21

Calculate present value

Answer 21

Capital/(1+r)^n

Question 22

Calculate value of a loan

Answer 22

E = sigma a/(1+r)^t

Question 23

Calculate constant annuity payment

Answer 23

a = E * r/1-(1+r)^-n

Question 24

Calculate perpetuity

Answer 24

E = a*1-(1+r)^-n/r

Question 25

Calculate simple interest

Answer 25

P*R*T

Question 26

Calculate compound interest

Answer 26

P*(1+r)^n

Question 27

Calculate annual percentage interest rate

Answer 27

i = r/12

Question 28

Calculate effective annual interest rate

Answer 28

i = (1+r)^1/12-1

Question 29

Calculate yield-to-maturity

Answer 29

YTM = sigma coupon/1(+r)^t + F (reimbursement premium)/(1+r)^t

Question 30

Calculate cash flow (indirect method)

Answer 30

1. Take net income 2. Add back non-cash expenses (e.g. DA) 3. Adjust gains/losses on sales in assets (add back losses/subtract gains) 4. Account for changes in non-cash current assets 5. Account for changes in all current assets and liabilities (except for notes payable and dividends payable)

Question 31

Restatement of operating subsidies/grants

Answer 31

Has to be added to net sales, so it is accounted for in Value Added, it is a part of how much the company generates

Question 32

Restatement of taxes

Answer 32

Operating costs from third parties - add to external services (meaning they are calculated as a part of VA).

Question 33

Restatement of leaseing

Answer 33

Two components: 1/4 a financial expense (fee - amortization) 3/4 amortization

Question 34

Restatment cost of labor factors

Answer 34

Cost of temporary employees + staff lend to company removed from external services Profit sharing and incentives added to EBITDA

Question 35

Restatement of other operating costs

Answer 35

Royalties on patents + losses on bad debts are added to external services

Question 36

Restatement of non-values (fictitious assets)

Answer 36

Elimination - subtract from equity (loan) Deferred charges Loan redemption premium

Question 37

Restatement of lease (balance sheet)

Answer 37

Lease —> investment of long term assets financed by debt from the lessor Fee to external service Amortization to DA Financial expense + remaining of fee

Question 38

Restatement of cashed out receivable (balance sheet)

Answer 38

+ trade accounts receivable + bank overdraft Both with the amount of the cash out

Question 39

Reclassification of distribution of income

Answer 39

Loss - deducted from equity Profit - dividend isolates in debt “dividend payable”