Flashcards in Portfolio/Fixed Income Basics Deck (21):
A fundamental analyst will examine what
- Outlook for the industry
- Management of the company
- Product lines of the company
- Anticipated introduction of new products
- Market share of the company
Assets - Liabilities = ??
Assets = ? + ?
Liabilities + Net worth
Current Liabilities on a balance sheet consist of
Memory Tool: W A I T
- Wages Payable
- Accounts Payable
- Interest Payable
- Taxes Payable
Net Working Capital = ?? - ??
Current Assets - Current Liabilities
Current Ratio = ?? / ??
Ratio used to measure liquidity
Current assets / Current Liabilities
What is the formula for the Quick ratio?
(Ratio used to measure liquidity)
(Current assets - Inventory) / Current liabilities
Ratios that are used to measure liquidity include?
- Current Ratio
- Quick Ratio (Acid test)
Highest quality companies with proven earnings and dividend records
Companies tat are in a period of above average growth due to rapid market expansion or unique products
Brand new ventures of high risk but also high potential reward. These companies have no track record and typically do not pay dividends
Mature companies with high dividend payout ratios - such as utilities
Companies whose fortunes track the business cycle closely
Companies whose fortunes operate in reverse to the business cycle
A company which remains unaffected during business cycle downturns
Companies that fly high during the business cycle upturns (Feast and famine periods that mirror the business cycle)
A company going through a takeover, restructuring, bankruptcy; or management change that will greatly change the nature of its operations
Total Return = ? + ?
Income + Growth
- Dividends for Equities
- Interest for Debt
Which method takes compounding into effect
Geometric average rate of return or Arithmetic average rate of return
Geometric average rate of return
An investment return of a company's stock varies directly with economic conditions - is what type of stock