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29 Cards in this Set
- Front
- Back
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Weighted Average Cost of Capital (WACC) |
= cost of equity (mkt val of equity/mkt val of debt+equity) + cost of debt (mkt val of debt/mkt val of debt+equity) |
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Quality of Revenue |
= Operating Cash Flows/ revenue |
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Fixed Asset Turn Over (FA/TO) |
=Total Revenues/ Avg Historical Costs |
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PP&E Average Age |
= Accum Dep/ Dep Exp |
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Average Useful Remaining Life |
= Avg Historical Cost/ Dep Exp |
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Average Collection Period (ACP) |
= 365 / (Sales/Avg A/R) |
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Days Inventory Onhand (DIO) |
= (Average Inventory/ COGS) x 365 |
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Average Payment Period (APP) |
= 365/ (Purchases of Inventory/Avg. total current liabilities) |
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Cash Conversion Cycle (CCC) |
=ACP + Conversion + DIO - APP |
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Avg Historical Cost |
= [(PP&E yr 1 + Accum Dep yr 1) + (PP&E yr 2 + Accum Dep yr 2)] / 2 |
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What does the WACC represent? |
The WACC represents the cost that it would take to raise an additional dollar of money |
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What does Quality of Revenue mean? |
The amount of revenues attributable to high revenue, low cost rather than artificial profits from accounting anomalies |
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What does FA/TO mean? |
Means that we generate $x.xx for every $ that we spend on FA |
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What does PP&E Average Age mean |
How old on average the equipment is |
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What does Average Useful Life Remaining mean? |
How many years left until the equipment is fully depreciated |
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What does Average Collection Period mean? |
How long it takes to collect A/R
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What does Days Inventory Onhand mean? |
This means how long you hold the inventory before selling it |
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What does Average Payment Period mean? |
APP means how long it takes for us to pay our A/P |
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Why is it good if the Cash Conversion Cycle is negative? |
If the CCC is negative, this is a good thing because it essentially means that your supplier is financing your business |
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Calculate Ending Inventory FIFO |
= End Inv. LIFO + LIFO Reserve |
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Calculate COGS FIFO |
= COGS - Change in LIFO Reserve |
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Calculate MKT Cap |
= (Price the stock is currently trading at) * (Weighted shares outstanding) |
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Calculate implied value of F/A after MKT Cap adjustments |
= MKT Cap - Cash - A/R - Inv (FIFO) |
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Return on Equity |
= Net income/ Total equity |
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Return on Assets |
= Net Income/ Total Assets |
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Profit Margin |
= Net Income/ Revenue |
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What is on the direct statement of cash flows? |
Cash Collected from Customers Cash paid for Inventory Cash paid for Operating Cash Paid for Interest |
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How do you calculate Inventory purchases? |
= COGS + (change in Inventory) |
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How do you calculate Cash Collected from Customers? |
= Sales - (Change in A/R) |
