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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
Cash Conversion Cycle Equation
Days in Inv + Days Sales in AR - Days of Payables Outstanding
26
Days in Inventory Equation
EI / Avg COGS per Day
27
Days Sales in AR
End AR / Avg Net Sales per Day
28
Days of Payables Outstanding
End AP / Avg COGS per Day
29
Inventory Turnover
COGS / Avg Inventory
30
AR Turnover
Net Sales / Avg AR
31
AP Turnover
COGS / Avg AP
32
Working Capital Turnover
Sales / Avg Working Capital
33
Reorder Point
Safety Stock + (Lead Time x Sales During Lead Time) WARNING: Be consistent with time!
34
EOQ Equation
SqRoot [(2 x Annual Sales per Unit x Cost per Purchase Order) / Annual Carrying Cost per Unit] WARNING: Be consistent with time!
35
APR of Quick Payment Discount
[360 / (Pay Period - Discount Period)] x [Discount / (100 - Discount)] WARNING: NO DECIMALS
36
Factoring Equation
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
37
Change in Credit Polices
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
Avg Gross Receivable Balance
Avg Daily Sales x Avg Collection Period
39
PV of an Annuity (Securities)
P x [(1 - PV Factor) / R] R= Rate of Return (CAPM) OR (Change in Price + Dividend Income) / Beg Price
40
PV Factor
1 / (1 + R)^ t ``` t= yrs R= Rate of Return (CAPM) ```
41
Dividend Growth Model (Not Perpetual)
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
Perpetuities (Zero-Growth Stock)
Dividend / Required Return
43
Equity Securities: Price to X ratio
P0 / X1 X = XPS X1 = X0 x (1 + G) G is % IF PEG: (PO / X1) / G G would be # NOT % (in final calculation)
44
Equity Securities: TRAILING Price to X ratio
P0 / X0 X=XPS IF PEG: (PO / X0) / G G would be # NOT %
45
Free Cash Flow
NI + Noncash Exp - Increase in WC - Capital Expenditures
46
Bond Price Calc
(Payment)/(1 + Mkt %)^t t+1 each year Final Year: (Payment + Face) / (1 + Mkt %)^t
47
CF for Budgeting (NPV)
Initial Outflows + CF Operating + 1 Time Cash Outflow (Disposal or Salvage) If Discounting, use PVOA only if CF are the same
48
Profitability Index
Used for Ranking PVFCF's / Cost of Initial Investment
49
Prime Costs
DM + DL
50
Conversion Costs
DL + O/H Applied
51
Applied Overhead: Traditional Costing Method
(Budgeted O/H / Single ESTIMATED Cost Driver) = O/H Rate x ACTUAL Cost Driver
52
Cost of Goods Manufactured (AFS)
Beginning WIP + Manufacturing Costs = Total Manufacturing Costs Incurred - Ending WIP
53
Product Cost
DM + DL + Applied O/H
54
Cost of Goods Sold
Beginning Finished Goods + COGM = COGA - Ending FG
55
Equivalent Units: Weighted Avg
2 Components Units Completed + (Ending WIP x % Completed) = EU (Beginning Cost + Current Cost) / EU = Cost per EU
56
Equivalent Units: FIFO
3 Components (Beginning WIP x (1 - % Complete) + (Units Completed - Beginning WIP) + (Ending WIP x % Complete) = EU Current Costs / EU = Cost per EU
57
Contribution Margin
SP - Variable Cost
58
Controllable Margin
Contribution Margin - Controllable "Fixed" Costs
59
Contribution by SBU
SP - All Costs
60
Total Factor Productivity (TFP)
Output / Total Costs
61
Partial Productivity Ratio (PPR)
Output / Qty of Material or Labor
62
ROI
Profit Margin x Investment Turnover
63
Profit Margin
NI / Sales
64
Investment Turnover
Sales / *Invested Capital *Avg Assets or Working Capital
65
DuPoint ROE
Net Profit Margin x Asset Turnover x Financial Leverage
66
Asset Turnover
Sales / Assets (Avg)
67
Financial Leverage
Assets / Equity
68
Extended DuPoint ROE
Tax Burden x Int Burden x EBIT Margin x Asset Turnover x Financial Leverage
69
Tax Burden
NI / Pretax Income
70
Int Burden
Pretax Income / EBIT
71
EBIT Margin
EBIT / Sales
72
Residual Income
NI - *(NBV Equity x Hurdle Rate) *Required Return on Equity
73
Economic Value Added
* NOPAT - (Investment x WACC) | * NOPAT = EBIT x (1 - T)
74
High-Low Method
1) *Change in Total Cost / *Change in Variable Cost = VC 2) Solve for FC using the highest or lowest cost *Highest vs Lowest
75
Absorption Approach (GAAP)
Revenue - COGS = Gross Margin - Operating Expenses = NI
76
Contribution Approach (NOT GAAP)
Revenue - VC = Contribution Margin - FC = NI
77
Breakeven Point in Units
Total FC / Contribution Margin per Unit
78
Breakeven Point in Dollar
Total FC/ Contribution Margin Ratio
79
Operating CF Ratio
CF from Operations / Current Liabilities
80
Working Capital Turnover
Sales / Avg WC
81
Debt Ratio
Total Liabilities / Total Assets
82
Gross Margin Ratio
(Sales - COGS) / Sales (net)
83
Profit Margin Ratio
NI / Sales (net)
84
Change in Real GDP
``` Multiplier = 1 / (1 - MPC) Change = Multiplier x Change in Spending ```
85
% Change GDP
(Current GDP / Prior GDP) - 1
86
Real GDP Calculation
GICE or IPIRATE | Government purchases + Investment + Consumption + Net Exports (Imports)
87
Inflation Rate
(CPI Current - CPI Prior) / CPI Prior
88
Real Interest Rate
Nominal Interest Rate - Inflation
89
Elasticity of Demand
% Change in Demand / % Change in Price
90
Net National Product
GNP - Depreciation
91
National Income
Net National Product - Indirect Business Taxes
92
Disposable Income
Personal Income - Taxes

BEC- Accounting (4 decks)

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