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40 Cards in this Set
 Front
 Back
Four (4) Categories of Financial Ratios

Profitability, Asset Utilization, Liquidity, Financial Leverage


List Three (3) Profitibality Ratios

Profit Margin (PM), Return on Assets (ROA), Return on Equity (ROE)


List Four (4) Asset Utilization Ratios

Receivables Turnover (Rt), Average Collection Period (Avg(ARCP)), Inventory Turnover (It), Total Asset Turnover (TAT)


List One (2) Liquidity Ratios

Current Ratio, Quick Ratio


List Three (3) Financial Leverage Ratios

Debt to Equity, Equity Multiplier (Em), Debt Ratio


What is the Simplified Dupont Identity?

ROA = PM x TAT


What is the Dupont Identity When Sales are considered in the equation?

ROA = NI/Sales x Sales/Assets


What is the Extended Dupont Identity?

ROA = NI/Sales x Sales/Assets x Assets/Equity


What is the entire Dupont System of Analysis?

(NI/Sales) = PM
(Sales/Assets) = TAT PM * TAT = ROA Debt/Assets = Financial Plan (FP) ROA/(1  FP) = ROE 

How is Profit Margin Profitabilty Ratio Calculated?

NI/Sales


How is ROA Profitability Ratio Calculated?

NI/Assets


How is ROE Profitability Ratio Calculated?

NI/Equity


How is Receivables Turnover (Rt) Asset Utilitization Ratio Calculated?

Sales/AR


How is Avg Collection Period (ACP) Asset Utilization Ratio Calculated?

AR/(Sales/365)


How is Inventory Turnover (It) Asset Utilization Turnover Ratio Calculated?

Sales/Inventory


How is Total Asset Turnover (TAT) Asset Utilization Turnover calculated?

TAT = Sales/Assets


How is Current Liquidity Ratio calculated?

CurRatio = CurAssets/CurLiabiliities


How is the Quick Liquidity Ratio calculated?

QuickRatio = (CurAssets  Inventory)/CurLiabilities


How is Debt to Equity Financial Leverage Ratio calculated?

(Lia/Equity)


How is the Equity Multiplier (Em) Financial Leverage Ratio calculated?

Em = Assets / Equity


How is the Debt Ratio (a Financial Leverage Ratio) calculated?

DebtRatio = Liabilities / Assets


How is the Depreciation Tax Shield calculated?

TaxShield = (Depreciation) x (Tax Rate)


What is Net Operating Cash Flow (NOCF)?

Cash flow resulting from day to day operations. This is the cash flow before capital expenditures and dividends are paid.


How is Net Operating Cash Flow (NOCF) calculated?

Net Income = (+Revenues Expenses depreciation Interest Taxes)
Net Income + Depreciation  (+/)NWC 

How is Net Income calculated?

Net Income = +Revenues Expenses depreciation Interest Taxes


What is Free Cash Flow (FCF)?

Free Cash Flow (FCF) is the cash flows available after neccessary capital expenditures, and dividends have been paid. Free Cash Flow is cash flow available for investment/growth.


How is FV Calculated?

FV = PV x (1 + i)^n


How is PV calculated?

PV = FV / (1 + i)^n


How is (n) calculated?

n = [ln(FV/PV)] / [ln(1 + i)]


How is (i) calculated?

i = [(FV/PV)^1/n]  1


How is the Periodic Rate (i) Calculated in terms of APR?

i = APR/m


How is the Periodic Rate (i) calculated in terms of EAR?

i = [(1 + EAR)^(1/m)]  1


An Increase to an Asset Account is a Use or Source of cash?

Use


An Increase to a Liabilities Account is a Use or Source of cash?

Source


An Increase to an Equity Account is a Use or Source of cash?

Source


A Decrease to an Asset Account is a Use or Source of cash?

Source


A Decrease to a Liabilities Account is a Use or Source of cash?

Use


A Decrease to an Equity Account is a Use or Source of cash?

Use


How is the Present Values of an Annuity Calculated (PVA)?

PVA = A x [ (1  1/((1+i)^n) ) / i ]


How is the Present Value of a Perpetuity calculated? (PVP)

PVP = A/i
