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BEC- Accounting > BEC Formulas > Flashcards

BEC Formulas Flashcards

1
Q

Effective Interest Rate Equation

A

Interest Paid Per Period / Net Proceeds of the Loan

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2
Q

Annual Percentage Rate (APR)

A

(Interest Paid Per Period / Available Funds) x Periods per Year

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3
Q

Effective Annual Interest Rate (EAR)

A

[1 + ( i / P)]^(P) - 1

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4
Q

Value of a Firm Equation

A

PV of Future Cash Flows / Weighted Avg Cost of Capital (WACC)

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5
Q

WACC Equation

A

WACC = (CE % x CE Cost) + (PE % x PE Cost) + [Debt (1 - Tax Rate)]

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6
Q

Weighted-Average Interest Rate

A

Interest Rate / Debt Outstanding

Outflow / Net Inflow

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7
Q

PE Cost Equation

A

Preferred Stock Dividends / Net Proceeds of PS

Outflows / Net Inflows (issuance costs)

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8
Q

CE Cost Equation (Cost of Retained Earnings): CAPM

A

RF Rate + [Beta x (Mkt Return - RF Rate)]

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9
Q

CE Cost Equation (Cost of Retained Earnings): DCF

A

D(1) / P(0) + Growth
D(1) = Dividend per Share after 1 Year
Dividend Today D(0) x (1 + Growth)

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10
Q

CE Cost Equation (Cost of Retained Earnings): BYRP

A

Pretax Cost LT Debt + (Mkt Return - RF Rate)

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11
Q

Risk Premium Equation

A

Mkt Return - RF Rate

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12
Q

Growth Rate Equation

A

ROE x Retention
or
(ROA x Retention) / (1 - (ROA x Retention)

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13
Q

Payout Rate Equation

A

Dividends per Common Share / Earnings per Common Share

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14
Q

Retention Equation

A

1 - Payout

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15
Q

ROA

A

NI / Avg Total Assets (BV or FMV)

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16
Q

ROE

A

NI / Avg Total Equity

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17
Q

ROI

A

NI / (Assets - Operating Liabilities)

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18
Q

ROS (Sales)

A

(NI - Int Income + Int Exp + Tax Expense) / Net Sales

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19
Q

Operating Leverage (DOL)

A

Fixed Costs / Variable Costs

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20
Q

Financial Leverage (DFL)

A

% Change EBT or EPS / % Change EBIT

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21
Q

Value of a Levered Firm (Has Debt)

A

Value of Unlevered Firm + [(Debt Int Rate x Amt of Debt x Tax Rate) / Debt Int Rate]

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22
Q

Equity Multiplier

A

Total Assets / Total Equity

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23
Q

Times Interest Earned Ratio

A

EBIT / Int Expense

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24
Q

Quick Ratio

A

(Cash and Equiv + ST Investments + Net Receivables) / Current Liabilities

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25
Q

Cash Conversion Cycle Equation

A

Days in Inv + Days Sales in AR - Days of Payables Outstanding

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26
Q

Days in Inventory Equation

A

EI / Avg COGS per Day

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27
Q

Days Sales in AR

A

End AR / Avg Net Sales per Day

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28
Q

Days of Payables Outstanding

A

End AP / Avg COGS per Day

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29
Q

Inventory Turnover

A

COGS / Avg Inventory

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30
Q

AR Turnover

A

Net Sales / Avg AR

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31
Q

AP Turnover

A

COGS / Avg AP

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32
Q

Working Capital Turnover

A

Sales / Avg Working Capital

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33
Q

Reorder Point

A

Safety Stock + (Lead Time x Sales During Lead Time)

WARNING: Be consistent with time!

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34
Q

EOQ Equation

A

SqRoot [(2 x Annual Sales per Unit x Cost per Purchase Order) / Annual Carrying Cost per Unit]

WARNING: Be consistent with time!

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35
Q

APR of Quick Payment Discount

A

[360 / (Pay Period - Discount Period)] x [Discount / (100 - Discount)]

WARNING: NO DECIMALS

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36
Q

Factoring Equation

A

1) AR x Fee x (Days in Year/Days in Period)
2) AR - Amt Withheld = Avg Proceeds
3) #2 x (Fee / 12) x (Days in Year/Days in Period)
4) #1 + #3 less expense saved
5) #4 / #2

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37
Q

Change in Credit Polices

A

1) Find difference in AR [Annual Sales / (360/Avg Collection Period)]
2) Find actual investment (#1 x Variable Cost)
3) Find Cost of Carrying (#2 x Req Rate of Return)

38
Q

Avg Gross Receivable Balance

A

Avg Daily Sales x Avg Collection Period

39
Q

PV of an Annuity (Securities)

A

P x [(1 - PV Factor) / R]

R= Rate of Return (CAPM) OR (Change in Price + Dividend Income) / Beg Price

40
Q

PV Factor

A

1 / (1 + R)^ t

t= yrs
R= Rate of Return (CAPM)
41
Q

Dividend Growth Model (Not Perpetual)

A

Pt = [Dt x (1 + G)^t] / (R - G)

Dt is always +1 more than Pt
Dividend is always +1 of whatever P is
If more than 1 year, (1 + G)^t

42
Q

Perpetuities (Zero-Growth Stock)

A

Dividend / Required Return

43
Q

Equity Securities: Price to X ratio

A

P0 / X1
X = XPS
X1 = X0 x (1 + G)
G is %

IF PEG: (PO / X1) / G
G would be # NOT % (in final calculation)

44
Q

Equity Securities: TRAILING Price to X ratio

A

P0 / X0
X=XPS

IF PEG: (PO / X0) / G
G would be # NOT %

45
Q

Free Cash Flow

A

NI + Noncash Exp - Increase in WC - Capital Expenditures

46
Q

Bond Price Calc

A

(Payment)/(1 + Mkt %)^t

t+1 each year

Final Year: (Payment + Face) / (1 + Mkt %)^t

47
Q

CF for Budgeting (NPV)

A

Initial Outflows + CF Operating + 1 Time Cash Outflow (Disposal or Salvage)

If Discounting, use PVOA only if CF are the same

48
Q

Profitability Index

A

Used for Ranking

PVFCF’s / Cost of Initial Investment

49
Q

Prime Costs

A

DM + DL

50
Q

Conversion Costs

A

DL + O/H Applied

51
Q

Applied Overhead: Traditional Costing Method

A

(Budgeted O/H / Single ESTIMATED Cost Driver) = O/H Rate x ACTUAL Cost Driver

52
Q

Cost of Goods Manufactured (AFS)

A

Beginning WIP + Manufacturing Costs = Total Manufacturing Costs Incurred - Ending WIP

53
Q

Product Cost

A

DM + DL + Applied O/H

54
Q

Cost of Goods Sold

A

Beginning Finished Goods + COGM = COGA - Ending FG

55
Q

Equivalent Units: Weighted Avg

A

2 Components

Units Completed + (Ending WIP x % Completed) = EU
(Beginning Cost + Current Cost) / EU = Cost per EU

56
Q

Equivalent Units: FIFO

A

3 Components

(Beginning WIP x (1 - % Complete) + (Units Completed - Beginning WIP) + (Ending WIP x % Complete) = EU
Current Costs / EU = Cost per EU

57
Q

Contribution Margin

A

SP - Variable Cost

58
Q

Controllable Margin

A

Contribution Margin - Controllable “Fixed” Costs

59
Q

Contribution by SBU

A

SP - All Costs

60
Q

Total Factor Productivity (TFP)

A

Output / Total Costs

61
Q

Partial Productivity Ratio (PPR)

A

Output / Qty of Material or Labor

62
Q

ROI

A

Profit Margin x Investment Turnover

63
Q

Profit Margin

A

NI / Sales

64
Q

Investment Turnover

A

Sales / *Invested Capital

*Avg Assets or Working Capital

65
Q

DuPoint ROE

A

Net Profit Margin x Asset Turnover x Financial Leverage

66
Q

Asset Turnover

A

Sales / Assets (Avg)

67
Q

Financial Leverage

A

Assets / Equity

68
Q

Extended DuPoint ROE

A

Tax Burden x Int Burden x EBIT Margin x Asset Turnover x Financial Leverage

69
Q

Tax Burden

A

NI / Pretax Income

70
Q

Int Burden

A

Pretax Income / EBIT

71
Q

EBIT Margin

A

EBIT / Sales

72
Q

Residual Income

A

NI - *(NBV Equity x Hurdle Rate)

*Required Return on Equity

73
Q

Economic Value Added

A
  • NOPAT - (Investment x WACC)

* NOPAT = EBIT x (1 - T)

74
Q

High-Low Method

A

1) *Change in Total Cost / *Change in Variable Cost = VC
2) Solve for FC using the highest or lowest cost

*Highest vs Lowest

75
Q

Absorption Approach (GAAP)

A

Revenue - COGS = Gross Margin - Operating Expenses = NI

76
Q

Contribution Approach (NOT GAAP)

A

Revenue - VC = Contribution Margin - FC = NI

77
Q

Breakeven Point in Units

A

Total FC / Contribution Margin per Unit

78
Q

Breakeven Point in Dollar

A

Total FC/ Contribution Margin Ratio

79
Q

Operating CF Ratio

A

CF from Operations / Current Liabilities

80
Q

Working Capital Turnover

A

Sales / Avg WC

81
Q

Debt Ratio

A

Total Liabilities / Total Assets

82
Q

Gross Margin Ratio

A

(Sales - COGS) / Sales (net)

83
Q

Profit Margin Ratio

A

NI / Sales (net)

84
Q

Change in Real GDP

A 
Multiplier = 1 / (1 - MPC)
Change = Multiplier x Change in Spending
85
Q

% Change GDP

A

(Current GDP / Prior GDP) - 1

86
Q

Real GDP Calculation

A

GICE or IPIRATE

Government purchases + Investment + Consumption + Net Exports (Imports)

87
Q

Inflation Rate

A

(CPI Current - CPI Prior) / CPI Prior

88
Q

Real Interest Rate

A

Nominal Interest Rate - Inflation

89
Q

Elasticity of Demand

A

% Change in Demand / % Change in Price

90
Q

Net National Product

A

GNP - Depreciation

91
Q

National Income

A

Net National Product - Indirect Business Taxes

92
Q

Disposable Income

A

Personal Income - Taxes

BEC- Accounting (4 decks)

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