BEC exam study Flashcards

1
Q

what’s Degree of Operating Leverage formula?

A

%change of EBIT / %change of sales revenue

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2
Q

What’s the Degree of a Financial Leverage formula?

A

%changeEPS / %change EBIT

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3
Q

What’s the Return On Investment formula?

A

Net Income / Avge Investment

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4
Q

What’s another way to calc Return On Investment?

A
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5
Q

what’s the net Profit Margin formula? (Return on sales)

A

Net Income / sales

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6
Q

what’s the Asset Turnover formula?

A

Net sales / assets

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7
Q

What’s the Degree of Financial Leverage formula in Du Pont?

A

assets / equity

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8
Q

what’s the Du Pont Return On Equity formula?

A

Profit margin(return on sales) X Asset Turnover X Degree of Financial Leverage = Du Pont ROE

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9
Q

What is the Inventory Turnover ratio?

A

COGS/Avg Inventory

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10
Q

What is the Inventory Conversion period ratio?

A
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11
Q

What is the Cost of Goods Sold formula?

A

Beg. Inv. + Purchases = Tot. Avail. for Sale - End Inv. = COGS

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12
Q

What is the Accounts Receivable Turnover formula?

A
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13
Q

What is the Receivables Collections Period / Days Sales in Receivables / Accounts Receivables Turnover in Days formula?

A

Ending A/R / (Net Credit Sales / 365)

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14
Q

How do you calc the Operating Cycle?

A
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15
Q

What is the economic value added formula?

A
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16
Q

What is the residual income formula?

A
17
Q

What’s the contribution margin?

A
18
Q

What is Accounts Payable Turnover formula?

A
19
Q

What is the Net Operating Cycle (Cash Conversion Cycle)?

A
20
Q

What is the Payables Deferrable Period?

A
21
Q

What is Investment Turnover ratio?

A

Net Sales / Average Investment (Debt + Equity). If Debt plus equity is not given then divide net sales by average Investment such as average plant assets (whatever is given).

22
Q

What is the Acid test ratio (quick ratio)?

A

Current Assets - Inventory / Current Liabilities

23
Q

What’s the formula to EPS calculation?

A

EPS = (net income – preferred dividends) / outstanding shares