8 Flashcards
deck 8
how do you convert cash to accrual basis for revenue?
cash basis rev + increase EB A/R - increase EB unearned rev = accrual basis rev
*SPEAR-BAR
what is A/R TO ratio?
net credit sales / avg. A/R
what is total asset TO?
net credit sales / avg. A
average collection period?
365 / A/R TO
how do you get COGS?
BI + net purch’s = COGAFS - EI = COGS
what is inv TO?
COGS / avg. inv (BI+EI/2)
what is QR?
(cash + net A/R + mkt sec’s) / CL
- no PPD exp or inv involved
what is cash ratio (CaR)?
(cash + CE + mkt sec’s) / CL
what is inv. conversion period (inv. TO in days)?
365 / inv TO
how do you calculate operating cycle?
A/R TO days + inv TO days
what is WC TO?
NS / avg WC
how is NPM calc’d?
NI / NS (both IS items)
what is ROA?
NI / avg. total A
what is DuPont ROA?
same as ROA
- formula is NPM (NI/NS) * asset TO (NS/avg A)
what is ROCE?
(NI - PD) / avg. common SE
how do you calculate times interest earned (ratio)?
(EBIT + int exp) / int exp
*EBIT = earnings before int+tax
what is op. CF to total debt?
op CF / total D
self-explanatory
how do you calculate bonus for existing partners or reduction ? (bonus method)
- OG partners + new partner cap. accounts = total
* (new partner % int. * total) - new partner investment = (bonus to OG partners) or bonus to new partner
how are assets contributed by a P’ valued?
they are valued at FMV - any related L’s assumed (mortgage note, etc)
- stock issued is credit at par value and any diff. is credited to APIC
what is the GW method for P’?
use the new partner’s cap acc. and multiply to 100%, then subtract the current cap. acc totals to get GW. GW is allocated b/w the OLD partners, not new.
what is the exact method?
use finger math; 1/4 interest = 4-1 = divide by 3 to get new cap account for new partner (add existing cap’s divide by 3)
