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?
What is the residual income formula?
What’s the contribution margin?
What is Accounts Payable Turnover formula?
What is the Net Operating Cycle (Cash Conversion Cycle)?
What is the Payables Deferrable Period?
What is Investment Turnover ratio?
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).
What is the Acid test ratio (quick ratio)?
Current Assets - Inventory / Current Liabilities
What’s the formula to EPS calculation?
EPS = (net income – preferred dividends) / outstanding shares
