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;
29 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
Progressive Tax
|
tax system where the marginal rates rise as income rises
|
going up
|
|
|
Agency Problem
|
Management tends to act as if they own the firm even if they control a small number of shares
|
|
|
|
Commercial Paper
|
short-term debt obligations of high credit worthiness corps...for example - Exxon-Mobile
|
|
|
|
Systematic Risk
|
risks related to the overall economy or markets
|
|
|
|
Default Risk Premium
|
risk of non-payment of interest owed and/or principle of loan
|
|
|
|
Quick Ratio (Acid Test)
|
Current Assets - Inventories / Current Liabilities
Measured in "x" (ex: 2.1x) |
Lower = Poor
|
|
|
Current Ratio
CR |
Current Assets / Current Liabilities
Measured in "x" (ex: 2.1x) |
Lower = Poor
|
|
|
Inventory Turnover Ratio
|
Sales / Inventory
Measured in "x" (ex: 2.1x) |
Lower = Poor
|
|
|
Days Sales Outstanding
DSO |
Accounts Receivable / (Sales/365)
Measured in "days" (ex: 36.5 days) |
Higher = Poor
|
|
|
Fixed Asset Turnover
FAT |
Sales / Net Fixed Assets
Measured in "x" (ex: 2.1x) |
Lower = Poor
|
|
|
Total Assets Turnover
TAT |
Sales / Total Assets
Measured in "x" (ex: 2.1x) |
Lower = Poor
|
|
|
Debt Asset Ratio
DAR |
Total Debt / Total Asset
Measured in "%" (ex: 20.3%) |
Higher = Poor
|
|
|
Profit Margin
PM |
EAT / Sales
|
Lower = Poor
|
|
|
Return On Assets
ROA |
EAT / TA
Measured in "%" (ex: 20.2%) |
Lower = Poor
|
|
|
Return On Equity
ROE |
EAT / Common Equity
Measured in "%" (ex: 20.2%) |
Lower = Poor
|
|
|
Price Earnings Ratio
P/E |
Mkt Val. of Common Share / Earnings Per Share
|
Lower = Poor
|
|
|
Earnings Per Share
EPS |
EAT / # Shares Outstanding
|
|
|
|
Price to Book Val. Ratio
P/B |
Mkt Price of Common Share / Book Val. for Share
|
Lower = Poor
|
|
|
Book Value Per Share
BVPS |
Common Equity / # of Shares Outstanding
|
|
|
|
Equity Multiplier
|
TA / Equity
|
Financial Leverage (debt)
|
|
|
2nd Du Pont System
|
ROA = (EAT / Sales) x (Sales / TA)
|
|
|
|
1st Du Pont System
|
ROE = ROA x TA/EQ (Equity Multiplier)
|
|
|
|
EAT/Sales
In 2nd Du Pont System |
Profit Margin (Profitability)
|
|
|
|
Sales/TA
In 2nd Du Pont System |
Efficiency
|
|
|
|
Market Segmentation
Theory 1 of Yield Curve |
1)Different Supply & Demand Relationship w/in various Segments
2)Different institutions doing business in the various segments of the yield curve |
|
|
|
Liquidity Preference
Theory 2 of Yield Curve |
- short-term is more liquid than long-term
- liquidity has value - Short-term has a lower interest rate than long-term |
|
|
|
Market Expectations (Interest Rate Approach)
Theory 3 of Yield Curve |
- Long-term rates is an avg of the current actual one year rate and expected future one-year rates up to the long-term bond's maturity
|
|
|
|
Market Expectations (Inflation Rate Approach)
Theory 3 of Yield Curve |
-Long-term rate is determined by the real-rate plus the premium for the expected future inflation plus any risk premiums
|
|
|
|
Measure of Efficiency
|
DSO, Sales/INV, Sales/NFA
|
what it is based on
|
