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bec2 Flashcards

1
Q

after tax cost of debt

A

yeild to maturity rate or market rate or pretax cost of debt* (1-tax rate)

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2
Q

A/R turnover

A

sales(net)/AVG A/R (net)

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3
Q

days sales in A/R

A

End. A/R (net)/Sales (net) / 365 “ Avg sales per day”

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4
Q

A/P turnover

A

COGS/AVG A/P

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5
Q

days of payables outstanding

A

End. A/P / COGS/365 “avg cogs per day”

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6
Q

quick ratio

A

cash & cash equivalents + short-term marketable securities + receivables (net) OR CA - inv. - prepaids / C/L

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7
Q

Inv. turnover

A

cogs/avg Inv.

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8
Q

cash conversion cycle “net” OC

A

days in Inv. + days sales in A/R - days of payables outstanding
(# days to sell + # days to collect - # days to repay)

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9
Q

cash conversion cycle

A

days in Inv. (end. Inv. / (cogs/365))+days sales in A/R ( End. A/R net / net (sales / 365)) - days of A/P outstanding ( End. A/P/ (cogs / 365))

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10
Q

cost of credit discount “not taking the discount”

A

)360 or # days in a year / ( total pay period - dis period) ) * ( dis % / ( 100% - dis% ))

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11
Q

the formula of economic order quantity contains (order size)

A

annual “s”ales(in units), cost per purchase “o”rder, “c”arrying a cost per unit ((consistency ))
= root of ( 2so)/c

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12
Q

reorder point

A

safety stock +(lead time*sales during lead time)

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13
Q

supply chain operations references model processes or core activities are

A

plan, source, make, deliver

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14
Q

examples of activities associated with Plan

A

balance demand and supply
. demand requirements ( sales forecast )
.ability of the suppliers to supply resources
. inventory levels

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15
Q

examples of activities associated with sources

A

procure the resources شراء الموارد

.selecting vendors

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16
Q

examples of activities associated with make

A 
raw material into finished goods 
. production process
. manufacturing
. packaging
.testing
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17
Q

examples of activities associated with deliver

A 
finished goods into the hands
. managing of orders
.forecasting توقع
.pricing
.transportation
.shipping
.labeling
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18
Q

zero balance account banking

A

accompanied by a master or parent account serves to fund any negative balance and maximize the idle cash

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19
Q

lockbox banking

A

expediting deposites by direct mailing of customers remittances to bank post office box

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20
Q

concentrating balance

A

single bak is designed as a central bank as of controlling receipts

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21
Q

compensating balances

A

minimum balances maintained by a bank within a loan

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22
Q

the cost of carrying A/R now is

A

the % of V.cost of the projected sales times the %RRR ( cost of the capital)during the collection period / # days in a year

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23
Q

PEG ratio

A

(current price of share / earning per share for last year) / ( projected growth rate * 100)

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24
Q

economic return in any investment or expected return on this investment

A

(“growth” change in price + dividend income) / beg. price

25
Q

price of equity( dividend growth model)

A

current price subscript 0 = dividend subscript 1 ( div subscript0*( 1+g)^y) / (R-G)

26
Q

valuing equity with P/E ratio

A

P0 = (p0/et)*E1

27
Q

valuating equity with the PEG

A 
P0 = PEG * Et * (G*100)
"Et= E0*(1+g)"
28
Q

zero growth - preferred stock

A

P = Div / R discount rate

29
Q

valuing debt instruments ( whats their price )

for example bonds that mature in 3 years

A

sum of pvcfs = coupon rate multiplied by the face or par value / ( 1 + R “ market interest rate “ ) ^1 + coupon rate multiplied by the face or par value / ( 1 + R “ market interest rate “ ) ^ 2 + ( par or face value + coupon rate multiplied by the face or par value) / ( 1 + R “ market interest rate “ ) ^

30
Q

profitability index formula

A

present value of net future cash inflows / present value of net initial investment or if the investment is not m all made at the time of the initial investment we change the denominator with the present value of future cash outflows

31
Q

economic value added concept formula is

A

after tax net income - minimum required returns

32
Q

payback period formula is

A

initial investment for the project / net annual cash inflow

33
Q

return on investment formula is

A

net profit * asset turnover

34
Q

annual operating cash flow

A

pre-tax cash inflow * ( 1- tax rate) + dep * (tax rate)

35
Q

initial cash outflow might include

A

new asset purchase price + associated costs with acquiring the asset + required increase in working capital

36
Q

if the discount ( hurdle) rate is greater than IRR internal rate of return “ return on investment “

A

the NPV will be Negative
hurdle rate = IRR when NPV = 0
hurdle rate > IRR when -NPV < 0
hurdle rate < IRR when +NPV > 0

37
Q

rule about present value factor affecting the internal rate of return

A

present value factor = investment / cash flows
any increase in present value factor will decrease the IRR. any increase in the initial investment or decrease in the cash flows will lead to increase in the present value factor which will affect the IRR to decrease

38
Q

total book value of the equity equals

A

net assets out of liabilities of the company

39
Q

market capitalization equals

A

(current) market share price * # shares outstanding

40
Q

value of equity using sector Price/Earning ratio

A

N.I * P/E multiple ratio

41
Q

value of equity using DDM equals

A

(current dividend (1+g)) / ( cost of equity using CAPM - growth rate)
cost of equity using CAPM = risk-free rate + ( betamarket risk premium )

42
Q

market value of bond equals

A

par value * current market value per bond / 1000

43
Q

cost of retained earnings equals

A

D1 or ((D0 * (1+g) ) / P0( +g

44
Q

cost of preferred stock equals

A

preferred div / market value of preferred stock

“ preferred div = preferred stock rate * pare value “

45
Q

after tax cost of debt equals

A

pre-tax cost of debt * (1-tax rate )

46
Q

total market value of common stock

A

of common shares * market price

47
Q

total market value of preferred stock

A

of preferred stock * preferred market price per share

48
Q

total market value of bonds

A

par value * ( current market value per bond / 1000

49
Q

weighted Avg cost of capital includes

A

( cost of R/E * weight of R/E or common stock ) + cost of P/S * weight of P/S) + ( post-t cost of bonds * weight of bonds )

50
Q

quick ratio equals

A

(cash & cash equivalent + A/R + N/R) / current L

51
Q

total debt ratio equals

A

total L / total A

52
Q

times interest earned equals

A

IBET/ int exp or earning before int & tax / int exp

53
Q

return on equity equals

A

N/I / Avg total equity “ ( equity y0 + equity y1) / 2”

54
Q

operating cash flow ratio equals

A

cash flow from operations / ending current liability

55
Q

profit margin

A

N/I / net sales

56
Q

change in finance cost

A

old finance cost - new finance cost “ first we find the new level of Receivables = sales * Rec collection period # days to collect / # days in a year usually 365 then finance cost charged by the factor = new level of Rec * % charge by the factor on cash

57
Q

operating leverage equals

A

fixed cost / variable cost

58
Q

require rate of return adjustments

A

do not include credit risk adjustment

Business (3 decks)

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