27.1-27.2 Application of FSA Flashcards
Operating Profit Margin formula:
Operating Profit Margin = ( Operating Profit / Net Sales ) *100
Types of analysis that can be used to screen for Potential Equity Investments:
Top-down analysis
Bottom-up analysis
Back-testing
Top-down analysis - an investment selection approach that begins with …
Consideration of macroeconomic conditions and then evaluates markets and industries based upon such conditions.
Bottom-up analysis - an investment selection approach that focuses on …
Company-specific circumstances rather than emphasizing economic cycles or industry analysis.
Back-testing - the process that approximates the …
Real-life investment process, using historical data, to assess whether an investment strategy would have produced desirable results.
How to calculate Net PPE?
Net PPE=Gross PPE+Capital Expenditures−AD
where:
AD=Accumulated depreciation
