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14 Cards in this Set
- Front
- Back
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Current Ratio
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Current Assets/Current Liabilities
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Cash Ratio
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(Cash + Mkt. Securities)/Current Liabilities
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Quick Ratio
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(Cash + Mkt. Securities + Account Receivables)/Current Liabilities
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Defensive Ratio
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(Cash + Mkt. Securities + Account Receivables)/Avg. Daily Expenditures
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Taxable Income (Formula)
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Pretax Income + Accounting Depreciation - Tax Deprecation
or Pretax Income + Deferred Tax Assets - Deferred Tax Liabilities |
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Income Tax Rate for Financial Reporting (Formula)
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Income Tax Expense/Pretax Income
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Deferred Tax Asset (Formula)
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(Tax Expense - Reporting Expense * t) + Previous Deferred Tax Asset
*** only If included in Pretax Income*** |
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Deferred Tax Liability (Formula)
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(Reporting Expense - Tax Expense * t) + Previous Deferred Tax Liability
*** only If included in Pretax Income*** |
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Beta (Un-Levered)
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B(L)/[1+(1-t)* (D/E)]
where: B(L)=Beta Levered (from comparable companies) t=marginal Tax Rate D/E=Debit to Equity Ratio of current company/project |
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Operating Cycle (Formula)
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Inventory Period (DOH) + Accounts Receivable Period (DSO)
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Cash Cycle (Formula)
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Inventory Period (DOH) + Accounts Receivable Period (DSO) - Payables Period (DPO)
or Operating Cycle - Payables Period (DSO) |
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Cost of Trade Credit
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[(1+Dr)/(1-Dr)]^365/N -1
where Dr=Discount Rate N=Number of days beyond Discount Period |
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Avg. Collection Period
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[CDPR * Discount Period] + [(1-CDPR) * Payment Period]
where: CDPR=Customer Discount Payment Rate |
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Equivalent-Annual-Annuity Approach (EAA)
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1. Calculate the NPV on each project
2. Enter each EAV as the "PV" 3. use the WACC as the "i" 4. Solve the "PMT". Higher, the better This is used only when there are uneven cash flows |
