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57 Cards in this Set
- Front
- Back
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REPS
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Retained earnings/# shares
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EBT
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earnings before taxes - pre-tax profit
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As interest rates go up what happens to cash values?
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cash values go down
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As inflation goes up what happens to interest rates
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interest rates go up
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3 advantages of P/E ratio analysis
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one assumption, math is easy, more applicable
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Round lots
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the usual amount of trading (100 shares)
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odd lots
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trading at different amounts of shares
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specialists/dealers are...
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-charged with maintaining an orderly market
- buy at the "bid" price and sell at the "ask" price |
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ticker that is 3 letters or less
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listed on an exchange
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Coverage ratio
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EBIT/interest expenses
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Fixed asset turnover
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Sales/FA
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ROE
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NI/Stockholder's Equity
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Discounted cash flow analysis
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The value of any asset can be determined by the sum of the present values of all its future cash flows
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coupon =
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par value X coupon rate (divide by 2 to adjust for semiannual)
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Receivables turnover
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Sales/AR
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Total Asset Turnover
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Sales/TA
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Profit Margin
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NI/Sales (return on sales)
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Current yield =
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annual coupon/current bond price
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Level 3 Nasdaq
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allows you to enter a price or "make a market" in a stock;available to dealers only
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Commodity Business
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Companies that are price-takers (Airline Industry)
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Franchise Value Companies
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Companies that are price setters (American Express, Starbucks)
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5 things to evaluate quality of management
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tenure with company, relationship with company, compensation, stock ownership, past performance
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4 things that can create "walls" or economic motes
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high switching costs, economies of scale, patents, network effect
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3 main ways to buy stocks
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full service brokers, discount brokers, online broker
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market order
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order to be executed immediately at best possible price
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limit order
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order to be executed at a specified price or better
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ROA
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NI/total assets
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stop order
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order that has a trigger price which, when hit, triggers a market order
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Current ratio =
benchmark = |
current assets/current liabilities
benchmark = 2 |
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As interest rates go up what happens to bond price
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Bond price goes down
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If YTM is greater than CPN then rate of the bond...
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trades at a discount
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Quick ratio =
Benchmark = |
(current assets - inventory)/current liabilities
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If YTM is less than CPN then the bond
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trades at a premium
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Level 1 Nasdaq
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best bid and offer prices; available to all investors
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If YTM = CPN
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bond trades at par value
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As interest rates go up, what happens to yields
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Yields go up
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EPS (E) =
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NI/# of shares
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As rating goes up, the what happens to risk?
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Risk goes down
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As rating goes down, then what happens to expected return?
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Expected return goes up
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Ticker is 4 or 5 letters
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OTC stock
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Level 2 Nasdaq
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All bid and offer prices; avaiable to brokers and some very active trackers
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Leverage Ratio =
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total assets/stockholder's equity
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As CPN goes up, what happens to interest rate risk?
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interest rate risk goes down
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Marketability risk
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The difference to fair value due to popularity at a given time
variability of price to value |
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DPS (D)
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Dividends/# of shares
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Inventory turnover
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Sales/inventory
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As rating goes down, what happens to risk?
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Risk goes up
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As rating goes down what happens to the likelihood of a special provision?
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Likelihood of a special provision goes up
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2 reasons that the yield curve is positively sloped
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liquidity, inflation is positive
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As interest rates go up, what happens to bond values?
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Bond values go down
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Worth =
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What we own - What we owe
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Net Working Capital (NWC)=
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Current assets - current liabilities
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Profitability Ratios
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how much a company generated with what they have
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Liquity is important to...
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short term creditors
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Efficiency is important to...
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stockholder's interest
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Debt utilization
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measure of how much debt the company has and how they are using that debt
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2 advantages of leverage
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tax advantage, magnify gains
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