BEC exam study Flashcards
what’s Degree of Operating Leverage formula?
%change of EBIT / %change of sales revenue
What’s the Degree of a Financial Leverage formula?
%changeEPS / %change EBIT
What’s the Return On Investment formula?
Net Income / Avge Investment
What’s another way to calc Return On Investment?
what’s the net Profit Margin formula? (Return on sales)
Net Income / sales
what’s the Asset Turnover formula?
Net sales / assets
What’s the Degree of Financial Leverage formula in Du Pont?
assets / equity
what’s the Du Pont Return On Equity formula?
Profit margin(return on sales) X Asset Turnover X Degree of Financial Leverage = Du Pont ROE
What is the Inventory Turnover ratio?
COGS/Avg Inventory
What is the Inventory Conversion period ratio?
What is the Cost of Goods Sold formula?
Beg. Inv. + Purchases = Tot. Avail. for Sale - End Inv. = COGS
What is the Accounts Receivable Turnover formula?
What is the Receivables Collections Period / Days Sales in Receivables / Accounts Receivables Turnover in Days formula?
Ending A/R / (Net Credit Sales / 365)
How do you calc the Operating Cycle?
What is the economic value added formula?