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CFA Level I > Vol. 3 LM4 Various Analysis > Flashcards

Vol. 3 LM4 Various Analysis Flashcards

1
Q

Concept

decomposition of ROE

p. 224

A

DuPont analysis

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2
Q

Describe

DuPont analysis

p. 224

A
  • Decomposition of ROE
  • involves expressing the basic ratio as the product of component ratios
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3
Q

Decompose

ROE

p. 225

A
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4
Q

Concept

p. 228

A

DuPont Analysis of ROE

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5
Q

List

valuation ratios

p. 230

A
  • P/E
  • P/CF
  • P/S
  • P/BV
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6
Q

Calculate

P/E Ratio

p. 230

A

numerator price per share
denominator earnings per share

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7
Q

Calculate

P/CF Ratio

p. 230

A

numerator price per share
denominator cash flow per share

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8
Q

Calculate

P/S Ratio

p. 230

A

numerator price per share
denominator sales per share

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9
Q

Calculate

P/BV Ratio

p. 230

A

numerator price per share
denominator book value per share

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10
Q

List

per-share quantities

p. 230

A
  • Basic EPS
  • Diluted EPS
  • Cash flow per share
  • EBITDA per share
  • Dividends per share
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11
Q

Calculate

Basic EPS

p. 230

A

numerator net income - preferred dividends
denominator weighted average number of ordinary shares outstanding

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12
Q

Calculate

Diluted EPS

p. 230

A

numerator adjusted income available for ordinary shares, reflecting conversion of dilutive securities
denominator weighted average number of ordinary and potential ordinary shares outstanding

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13
Q

Calculate

Cash flow per share

p. 230

A

numerator cash flow from operations
denominator weighted average number of shares outstanding

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14
Q

Calculate

EBITDA per share

p. 230

A

numerator EBITDA
denominator Weighted average number of shares outstanding

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15
Q

Calculate

Dividends per share

p. 230

A

numerator common dividends declared
denominator. weighted average number of ordinary shares outstanding

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16
Q

Calculate

Dividend payout ratio

p. 230

A

numerator Common share dividends
denominator Net income attributable to common shares

17
Q

Calculate

dividend payout ratio

p. 230

A

numerator Common share dividends
denominator Net income attributable to common shares

18
Q

Calculate

Retention rate (b)

p. 230

A

numerator net income attributable to common shares - common share dividends
denominator net income attributable to common shares

19
Q

Fill in the blank

Because P/E ratios are calculated using net income, the ratios can be sensitive to ____ or ____

p. 231

A

non-recurring earnings
OR
one-time earnings events

20
Q

Concept

this ratio may be preferable to the P/E ratio where earnings quality may be an issue

p. 231

A

price to cash flow

21
Q

Concept

Because it is calculated using income before interest, taxes, and depreciation, it can be used to eliminate the effect of different levels of fixed asset investment across companies

p. 231

A

EBITDA per share

CFA Level I (64 decks)

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