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Flashcards in Notes 3 Deck (51):
1

Gross Profit

Sales
- COGS

2

COGS

Beginning Inventory
+Purchases
- Ending Inventory

OR

???
COG Manufactured
- Beginning Inventory
+ Ending Inventory

3

Gross Margin

Gross Profit /
Sales

OR

COGS * Gross Margin %

4

Gross Margin %

Gross Margin /
COGS

5

Ending Accounts Payable

Beginning Accounts Payable
+ Purchases
- Cash Disbursements
= Ending Accounts Payable

6

Net Realizable Value (NRV)

Units * Selling Price
= Total
- Disposal cost
= Net Realizable Value (NRV)

7

Reorder Point

Units of Demand during Lead-Time
+ Required Safety Stock

8

Total Applied Overhead

Standard Cost /
Standard Hours

OR

Application rate per hour * Actual Hours

9

Contribution Margin

Sales
-Variable Cost

10

Breakeven Units
aka Units to Breakeven

Fixed Costs /
Contribution Margin per unit

11

Units sold

Fixed costs + Profit /
Contribution Margin per unit

12

Before-Tax Profit

~ A = B + t ~

After-tax profit /
(1 - tax rate)

13

After-Tax Profit

~ A = B + t ~

Before-tax profit * (1 - tax rate)

14

Contribution Margin Ratio

Contribution margin per unit /
Selling Price per unit

15

Dollars to Break Even

Fixed Costs /
Contribution Margin % Ratio

16

Target Net Income

Fixed Costs + Net Income /
Contribution Margin

17

Sales Price

Variable Costs per unit
+Fixed Cost per unit
+Net Income desired

18

Contribution Margin Ratio

Price - Variable Cost /
Price

OR

Sales - Variable Cost /
Sales

19

Contribution Margin per Unit

Sales per unit
-Variable Cost per unit

OR

Change in Revenue /
Change in Volume

20

Margin of Safety

Excess Sales over Break Even

21

Profit Margin

Net Income after Interest & Taxes /
Net Sales

22

Operating Profit Margin

Operating Profit /
Net Sales

23

Return on Assets
(aka Return on Investment)

Net Income after Interest & Taxes /
Average Total Assets

OR

Net Profit * Asset Turnover

24

Return on Equity

Cash Dividend per common share /
Earnings per Share

25

Cost of Equity

(Expected Dividend /
Current Share Price)
+ Growth Rate

26

Cost of Debt

(Interest Expense - Tax Benefit) /
Carrying Value of Debt

27

Dupont ROI

Net Income /
Total Assets

OR

Return on Sales /
Asset Turnover

28

Residual Income

Net Income
- (Required Rate of Return * Invested Capital)

29

Economic Value Added

Net Profit After Taxes
- ((Total Assets - Current Liabilities) * WACC)

OR

Operating Income after Tax
- (Net Assets * WACC)

30

Free Cash Flow

Operating Income after Tax OR Net Profit after Taxes
+ Depreciation & Amortization
- Capital Expenditures
- Change in Net Working Capital

31

Financial Spread

Return on Income (ROI)
- Cost of Capital (CoC)

32

Interest Yield

Interest Payment /
Bond Price

33

Inventory Reorder Point

Average Daily Demand (aka Sales)
* Average Lead Time (aka Wait Time)

34

Net Working Capital

Current Assets
- Current Liabilities

35

Profitability Index

PV of Future Cash Flows /
PV of Initial Investment

36

Dividend Payout Ratio

Cash Dividend per common share /
Earnings per Share

37

Accounts Receivable Turnover

Net Credit Sales /
Average Accounts Receivable

38

Average Collection Period

Average Accounts Receivable /
Average Sales per Day

39

Inventory Turnover

Cost of Goods Sold /
Average Inventory

40

Number of Days Sales in Inventory

Average Inventory /
(COGS / 365)

41

Fixed Asset Turnover

Sales /
Average Net Fixed Assets

42

Total Asset Turnover

Sales /
Average Total Assets

43

Investment Turnover

Sales /
Average Investment

44

Current Ratio

Current Assets /
Current Liabities

45

Quick Ratio

(Current Assets - Inventory - Prepaid Expenses) /
Current Liabilities

46

Debt to Total Assets

Total Liabilities /
Total Assets

47

Debt to Equity

Total Liabilities /
Total Equity

48

Times Interest Earned

Earnings before Interest & Taxes (EBIT) /
Interest Expense

49

P/E Ratio

Stock Price per share /
Earnings per Share (EPS)

50

Book Value per share

Common Stock Equity /
# of common shares outstanding

51

Market/Book Ratio

Market Value per share of common stock /
Book Value per share of common stock