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Ninja Flash Cards: BEC > BEC Formulas > Flashcards

BEC Formulas Flashcards

1
Q

APR (annual percentage return)

A

APR (annual percentage return) = Effective Interest Rate * # of periods in year

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2
Q

Asset turnover

A

Asset turnover = Sales / Total Assets

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3
Q

Average accounts receivable

A

Average accounts receivable = (Beg. A/R + End. A/R) / 2

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4
Q

Average accounts receivable collection period

A

Average accounts receivable collection period = sales on credit / average accounts receivable

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5
Q

Average inventory

A

Average inventory = (Beginning inventory + Ending inventory) / 2 Make sure to use 365 days per year unless stated otherwise

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6
Q

Average total assets

A

Average total assets = (Beginning total assets + Ending total assets) / 2

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7
Q

Book value per share

A

Book value per share = common stock equity / common stock shares outstanding

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8
Q

Breakeven Point in terms of dollars

A

Breakeven Point in terms of dollars = fixed costs / contribution margin ratio

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9
Q

Breakeven Point in terms of units

A

Breakeven Point in terms of units = fixed costs / Contribution Margin

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10
Q

Cash conversion cycle

A

Cash conversion cycle = inventory conversion period + receivables collection period - payables deferrable period

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11
Q

Common stockholders_ equity

A

Common stockholders_ equity = stockholders_ equity _ preferred stock liquidation value

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12
Q

Contribution Margin

A

Contribution Margin = revenue _ variable costs

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13
Q

Contribution Margin Ratio

A

Contribution Margin Ratio = (sales _ variable costs) / sales

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14
Q

Cost of financing

A

Cost of financing= (Total assets _ current liabilities) * Weighted average cost of capital

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15
Q

Cost of Goods Sold

A

Cost of Goods Sold = Beg. Inventory + Inv. Purchases _ End. Inventory

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16
Q

Cross-Elasticity

A

Cross-Elasticity = % change in demand for certain product A / % change in price of certain product B.

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17
Q

Current ratio

A

Current ratio = current assets / current liabilities

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18
Q

Debt to equity

A

Debt to equity = Total debt / total equity

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19
Q

Debt to total assets

A

Debt to total assets = total liabilities / total assets

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20
Q

Discounted Payback Period

A

Discounted Payback Period = multiply by Present Value factor until initial invested amount reached. Disregard salvage value

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21
Q

Dividend Payout Ratio

A

Dividend Payout Ratio = cash dividend per share / Earnings per share

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22
Q

Economic Value Added

A

Economic Value Added = net operating profit after taxes (NOPAT) _ cost of financing

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23
Q

Effective Interest Rate

A

Effective Interest Rate = (principle * rate * time) / principle

24
Q

Fixed asset turnover

A

Fixed asset turnover = sales / average net fixed assets

25
Q

Gross Margin

A

Gross Margin = revenue _ cost of goods sold (or gross profit)

26
Q

Gross Profit

A

Gross Profit = revenue _ cost of goods sold

27
Q

Income Elasticity

A

Income Elasticity = % change in quantity demanded / % change in income

28
Q

Internal Rate of Return

A

Internal Rate of Return = Initial Investment + Cash Flow in Period n/ (1 + Discount Rate) to the nth power (# of periods).

29
Q

Inventory conversion period

A

Inventory conversion period = Average Inventory / Cost of sales per day

30
Q

Inventory Turnover

A

Inventory Turnover = cost of goods sold / average inventory

31
Q

Marginal propensity to consume

A

Marginal propensity to consume = change in spending / change in disposable income

32
Q

Marginal propensity to save

A

Marginal propensity to save = change in savings / change in income

33
Q

Marginal utility

A

Marginal utility = change in total utility / change in quantity

34
Q

Market Capitalization

A

Market Capitalization = Common stock price per share * common stock shares outstanding

35
Q

Market/Book Ratio

A

Market/Book Ratio = common stock price per share (or market value)/ book value per share

36
Q

Number of Days Sales in Inventory

A

Number of Days Sales in Inventory = # of days in year (usually 365 or 360) / Inventory Turnover

37
Q

Operating leverage

A

Operating leverage= % change in operating income / % change in unit volume

38
Q

Operating Profit Margin

A

Operating Profit Margin = Operating profit / net sales

39
Q

Price/Earning (PE) Ratio

A

Price/Earning (PE) Ratio = common stock price per share / Earning per share

40
Q

Profitability Index

A

Profitability Index = project net present value / cost of project

41
Q

Quick Ratio

A

Quick Ratio = Quick assets (cash, marketable securities, and A/R) / current liabilities

42
Q

Receivable Turnover

A

Receivable Turnover = Net credit sales / average accounts receivable

43
Q

Receivables Collection Period

A

Receivables Collection Period = Average Accounts Receivable / Credit Sales per day

44
Q

Reorder Point

A

Reorder Point= delivery time of stock + safety stock or could be stated as = average daily demand * average lead time

45
Q

Residual Income (RI)

A

Residual Income (RI) = operating profit _ interest on investment (or required rate of return)

46
Q

Return on Assets (ROA)

A

Return on Assets (ROA) = net income / average total assets

47
Q

Return on Equity (ROE)

A

Return on Equity (ROE) = net income / Average common stockholders_ equity

48
Q

Return on Investment (ROI)

A

Return on Investment (ROI) = Net Income / Total Assets

49
Q

Return on sales (ROS)

A

Return on sales (ROS) = net income / Sales

50
Q

Safety Stock

A

Safety Stock= (Max. Daily demand * Max. Lead time) _ reorder point

51
Q

Times interest Earned Ratio

A

Times interest Earned Ratio = earnings before interest and taxes / interest expense

52
Q

Total asset turnover

A

Total asset turnover = sales / average total assets

53
Q

Total costs

A

Total costs = fixed costs + variable costs or y = mx + b, where m = slope, x = variable value, and b = y intercept

54
Q

Weighted Average Cost of Capital

A

Weighted Average Cost of Capital = [(cost of capital A / Total Amount)(rate of cost)(1-Tax Rate)] + [(cost of capital B / Total cost amount)(rate of cost)]

55
Q

Work in process

A

Work in process = Direct Material used + Direct Labor + Manufacturing Overhead

Ninja Flash Cards: BEC (10 decks)

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