Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
26 Cards in this Set
- Front
- Back
|
Effective APR
|
stated interest rate adjusted for compounding periods per year
(1 +i/p)^p - 1 |
|
|
Simple Interest Amount
|
interest paid only on the original amount of principle
Principle (interest rate) (# of time periods |
|
|
Compound Interest Amount
|
Principle (1 +i)^ # of time periods
|
|
|
Degree of Operating Leverage
|
degree to which a firm uses fixed operating costs to magnify a change in sales
DOL = % change in EBIT/ % change in sales |
|
|
Degree of Financing Leverage
|
Degree to which a firm uses financial costs to magnify a change in sales
% Change in EPS/ % Change in EBIT |
|
|
Degree of Combined Leverage
|
Fixed cost resources and fixed financing resources to magnify a change in income
% change in EPS/ % change in sales DOL * DFL = DCL |
|
|
Weighted Average Interest Rate (Used in WACC)
|
Effective Annual Interest Payments/ Debt Cash Available
|
|
|
Cost of long term debt
|
After tax cost of raising long term funds
kdt =( I + (PV- Nd)/n)/ (Nd + PV)/2 after tax = kdt * (1-tx rt) |
|
|
Cost of preferred stock
|
Cash dividends/ Net proceeds of pref stock
|
|
|
Cost of retained earnings
|
CAPM
|
|
|
ROI
|
income/ investment capital
|
|
|
ROA
|
NI/ Avg Assets
|
|
|
Residual Income
|
Net Income- Required Return
|
|
|
Payment Discount Formula
|
(360- Pay period-discount period) * % discount/100-% discount
|
|
|
Inventory Conversion Period
|
Average Inventory/ Average Cost of Sales Per Day
|
|
|
Receivables Collection Period
|
Average Receivables/ Average Sales per day
|
|
|
Payables deferral Period
|
Average Payables/ Average purchases per day
|
|
|
Increase inventory turnover savings
|
decreased inventory * APY
|
|
|
Margin of safety
|
excess of sales over breakeven sales
|
|
|
Economic Value Added
|
similar to residual income
|
|
|
Mneumonic for Variance
|
Price D*A
Usage D*S Rate D*A Efficiency D*S |
|
|
Sales Volume Variance
|
(Actual sold- budgeted sold) * Std CM/unit
|
|
|
Sales Mix Variance
|
(Actual Product Mix Ratio- Budgeted Product Mix Ratio)*Actual sold units * Budgeted CM/unit of that product
|
|
|
Sales Quantity Variance
|
Sales Volume Variance * Budgeted Product Mix
|
|
|
Selling Price Variance
|
Actual SP- Budgeted SP *Actual Sold Units
|
|
|
Return on Investment Capital
|
the net income of a company plus interest expense which is then divided by the average total invested capital
|
