• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

Card Range To Study



Play button


Play button




Click to flip

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;

25 Cards in this Set

  • Front
  • Back
Accrued L + A/P + Current portion of long-term note payable =
=Current liabilities
Cash+ A/R + inventory =
Current Assets
Prepaid assets - not CA
Avg. Gross Receivable balance =
AVG daily sales x Avg collection period
Gross Margin =
= ( unit price - unit cost ) x number of units
The debt-to-equity ratio measures the
% of total financing provided by creditors (debt) compared to financing by owners.
The interest coverage ratio measures the
firm's ability to make required interest payments. The higher - the greater ability to repay the debt.
The return on Equity reflects the
net income that accrued to owners
If there is no provision for allocating losses ->
the method used to allocate profits will be used
Inventory T/Over ratio
= COGS/ AVG Inventory
List major risks associated with the A/R component of the system?
Credit may be applied to improper accounts
Updates of credit ratings may be untimely
Financial or management reporting may be inaccurate
EVA % =
RCOE % - WACC %,
where RCOE = Oper. income / capital,
WACC = Cost of debt + cost of equity
What costs are relevant in decision making?
only INCREMENTAL (fixed or variable)
Seasonality in data may be removed by calculating a
WEIGHTED AVERAGE of the data for the four seasonal time periods
Treating dividends as a residual part of a financial decision assumes that
earnings should be retained and reinvested as long as profitable projects are available
Interest on long-term debt costs ______ than interrest on short-term debt because
of risk associated with longer maturity dates
The intercept value is where the line crosses the _____ axis.
Y axis
The implicit cost of debt financing is the
increase in the cost of debt and equity as the debt-to-equity ration increases
ADRs are receipts issued by a US bank which represents ownership rights in
a foreign corporation
Cost of asset + increase in WC - tax saved - cash received from sale of old asset =
Total revenue - total Var. costs- total Fixed Costs
At what rate company would be INDIFFERENT to the investment?
at the IRR
CF * IRR ( or annuity factor)= PV of initial investment
How do you solve the problem if CL is known and Current Ratio will change from 1.75 to 1.5 to 1?
CA + inc in Inv / CL + inc in Inv. = 1.5
How to calculate conversion costs transfered to second department using WA method and normal spoilage is given?
1) calc. Equivalent units= completed + spoiled + % completed of end units
2) Cost per Eq. unit = Total conversion costs / Eq. units
3) Conversion costs transferred = Cost per unit x ( Good units + Normal spoilage)
Leverage refers to the amount of _________ in the firm's structure
FIXED OVERHEAD is a Product cost for ABSORPTION COSTING at the time of _________ and
a PERIOD COST under Variable costing at time of ________