Financial Mgmt. - Byu - Fall 2012

Front 1

Operating Income

Back 1

EBIT
Operating Profit

Hint 1

Gross margin less operating expenses. Separate from non-operating revenues and expenses; only from normal, recurring activities. Usually more predictable than non-operating revenues/expenses.

Front 2

Net Receivables

Back 2

Accounts Receivable

Hint 2

Current asset; represents money owed to firm for services rendered.

Front 3

Net Income

Back 3

Net Profit/Loss

Hint 3

Also "profit", "earnings" or "net earnings" -- amt of any increase in net assets during a period of time due to profitable operations.

Front 4

Total Debt

Back 4

Total Liabilities

Hint 4

Total probable future obligations to pay assets (usually cash) or provide services to another entity. Result of debt financing.

Front 5

PP&E

Back 5

Property, Plant and Equiptment

Hint 5

Long-term asset: land, buildings, vehicles, machinery, etc. with expected useful life over one year. Expenses are accrual based, for period incurred, which are referred to as depreciation. Only book values recorded.

Front 6

COGS

Back 6

Cost of Goods Sold

Hint 6

Cost of raw materials for operations, typically second line of income statement.

Front 7

SG&A

Back 7

Selling, General & Admin

Hint 7

Any selling and administrative costs incurred that benefit the company's operations. Often reflected as operating expenses.

Front 8

P&L

Back 8

Profit and Loss

Front 9

Quick Ratio

Back 9

Acid-Test Ratio

Hint 9

Liquidity ratio - (Current assets-inventory)/current liabilities

Front 10

Capex

Back 10

Capital Expenditures

Hint 10

Payment accounted as part of capitalized cost of asset, including those made in acquisition, preparation of said asset to get it ready for intended use, and any costs of improvement. Expenditures made in the purchase of inventory, supplies, PP&E and prepayment of expenses are all examples of capitalized expenditures because they are payments made in acquisition of assets.

Front 11

NWC

Back 11

Net working capital

Hint 11

Current Assets-Current liabilities

Front 12

Earnings

Back 12

Net income

Front 13

EPS

Back 13

Earnings per share

Front 14

EAR

Back 14

Effective annual return

Hint 14

APY

Front 15

APY

Back 15

Annual percentage yield

Hint 15

EAR

Front 16

SGR

Back 16

Sustainable growth rate/Internal growth rate

Front 17

Retained earnings

Back 17

New RE = Old RE + NI - Dividends

Hint 17

Dividends = Old RE + NI - New RE

Front 18

Statement of Cash Flows

Back 18

CFO+CFI+CFF

Front 19

Cash Flow - Operations

Back 19

Net income
Add: Depreciation expense
Less: Operating assets (if increase, subtract; if decrease, add)
Add: Operating liabilities (if increase, subtract; if decrease, add)

Hint 19

Inflow: Generation of funds in normal operations
Outflow: Expenditure of funds in normal operations

Front 20

Cash Flow - Investing

Back 20

Change in gross PP&E (if increase, subtract; if decrease, add)

Hint 20

Inflow: Sale of plant and equip., liquidation of long-term investment
Outflow: Purchase of plant and equip., long-term investment

Front 21

Cash flow - financing

Back 21

Add: Change in notes payable
Change in long-term debt
Change in preferred stock
Change in common stock
Less: Dividends paid out

Hint 21

Inflow: sale of bonds, common stock, preferred stock, and other securities
Outflow: Retirement or repurchase of bonds, commons stock, preferred stock, and other securities, payment of cash dividents

Front 22

Current ratio

Back 22

current assets/current liabilities

Hint 22

Liquidity - tells us the $ of ca we have to cover cl

Front 23

Average collection period

Back 23

accounts receivable/ daily credit sales

Hint 23

Liquidity - tells us on average how long it takes for us to collect our receivables

Front 24

AR turnover

Back 24

credit sales/account receivable

Hint 24

Liquidity - tells us on average how many times we go through/turn over our AR in a year

Front 25

Inventory turnover

Back 25

COGS/inventory

Hint 25

Liquidity - Similar to AR turnover, tells us how many times we go through our inventory balance in a year

Front 26

Total asset turnover

Back 26

sales/total assets

Hint 26

Efficiency - How many dollars of sales we are generating per $ of asset

Front 27

Fixed asset turnover

Back 27

sales/fixed assets

Hint 27

Efficiency - how many $ of sales we are generating per $ of FA, how good are we at using FA to generate sales

Front 28

OIROI

Back 28

operating income/total assets

Hint 28

Efficiency - How many dollars of OI we are generating per dollar of assets, how good are we at generating OI with our assets

Front 29

Debt ratio

Back 29

total debt/total assets

Hint 29

Financing - What % of our assets are financed with debt

Front 30

Times interest earned

Back 30

EBIT/interest expense

Hint 30

Financing - what our ability is to cover our interest costs

Front 31

Return on assets

Back 31

net income/total assets

Front 32

Return on equity

Back 32

net income/total equity

Hint 32

Profitability

Front 33

Gross margin

Back 33

gross profit/sales

Hint 33

Profitability

Front 34

Gross profit

Back 34

sales - COGS

Front 35

Operating margin

Back 35

EBIT/Sales

Hint 35

Profitability

Front 36

EBIT

Back 36

Sales-COGS-SG&A

Front 37

Net margin

Back 37

net income/sales

Hint 37

Profitability

Front 38

Net income

Back 38

sales-COGS-SG&A-interest-taxes

Front 39

ROE

Back 39

NI/Equity
NI/equity = NI/sales x sales/assets x assets/equity

Hint 39

DuPont Decomposition

Front 40

Net Profit margin

Back 40

NI/Sales

Hint 40

Operating Efficiency

Front 41

Asset Turnover

Back 41

Sales/Assets

Hint 41

Asset Use Efficiency