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35 Cards in this Set
- Front
- Back
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NOWC
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current operating assets - current operating liabilities
current operating assets = cash + A/R + inventories Current operating liabilities = A/P + accrued expenses |
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Initial Year Net Cash Flow (Net CF0)
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Equipment + Installation + Change NOWC
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Annual Operating Cash Flows (Operating CF)
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Revenues - operating costs - depreciation expense = operating income (before-tax)
Operating income (BT) - tax = operating income (AT) Operating income (AT) + depreciation expense = Operating CF |
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Terminal Net Cash Flow (Terminal CF)
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Recovery of NOWC
Salavage value - book Tax on SV Terminal CF |
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After-Tax opportunity Cost
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A-T Opportunity Cost = Annual CF (1-t)
- what we would have left over after-taxes |
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E(NPV)
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SUM[(probability)(NPV)]
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sqroot [SUM[(probability)(NPV - E(NPV))^2]]
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CVnpv
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Standard deviation NPV / E(NPV)
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Operating Break Even
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How many units you have to sell to cover fixed expenses
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Financial Break Even
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CPT PMT = OCF
Q = (FC + OCF) / (P - VC) |
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Operating Leverage
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the relationship between sales and operating cash flow
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Financial Leverage
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Combined Leverage
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EPS - Earning Per Share
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TIE
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- amount of times can cover interest expense
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Shares Repurchased
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D / P
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Stock Price (zero growth)
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The Hamada Equation
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- Find firms current levered beta
rs = rrf + (rpm - rf)b - find firms unlevered beta - hamada equation - find new levered beta - hamada equation - find firms new cost of equity rs = rrf + (rpm - rf)b |
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E(EPS)
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SUM[probability(EPS)]
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EPS CV
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standard deviation / (e(EPS))
- highest = most risky |
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ROIC
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EBIT (1-T) / total capital
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Net Income
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EBIT
Interest ------------ EBT Tax ------------ Net Income |
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ROE
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net income / invested capital(1-t)
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Additional Funds Needed (AFN)
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A* , L* - only spontaneous changes
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DSO
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AR / (Sales/365)
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New Inventory Turnover
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Sales / Inv
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New Fixed asset turnover
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Sales / FA
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New Current Ratio
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CA / CL
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Operating Capital
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NOWC + Net FA
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Free Cash Flow (FCF)
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= NOPAT - Net inv. in OC
= EBIT(1-t) - net inv. in OC |
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Target fixed assets to sales
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Actual fixed assets / full capacity sales
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Target fixed assets
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(FA / Sales ratio)(S1)
- FA level at S1 |
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Total Liabilities and Equity
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= account payable + long-term debt + common stock + retained earnings
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Total debt
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accounts payable + long term debt
OR = total liabilities and equity - common stock - retained earnings |
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Full capacity sales
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actual sales / (% of capacity at which FA are operated)
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