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CMA Exam Part 2 > CMA Exam: Study Unit #2 > Flashcards

CMA Exam: Study Unit #2 Flashcards

1
Q

Current Assets

A
  1. Cash and equivalents
  2. Securities
  3. Net Acct Rec.
  4. Inventories
  5. Prepaid expenses
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2
Q

Current Liabilities

A
  1. Accounts Payable
  2. Notes Payable
  3. Current Maturities on LT debt
  4. Unearned Revenue
  5. Accrued Salary & Wages
  6. Taxes Payable
  7. Other Accruals
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3
Q

Liquidity Ratios

A
  1. Current Ratio
  2. Quick Ratio
  3. Cash Ratio
  4. CF Ratio
  5. NWC
  6. NWC Ratio
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4
Q

Liquidity Ratio

Current Ratio

A

CA/CL

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5
Q

Liquidity Ratio

Quick Acid-Test Ratio

A

CA-Inv-Pre/CL

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6
Q

Liquidity Ratio

Cash Ratio

A

CA+Sec/CL

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7
Q

Liquidity Ratio

CF Ratio

A

CF. Op/CL

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8
Q

Liquidity Ratio

NWC

A

CA-CL

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9
Q

Liquidity Ratio

NWC Ratio

A

CA-CL/TA

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10
Q

Activity Ratios

A
  1. A/R Turnover
  2. Days Sales in A/R
  3. Inventory Turnover
  4. Days Sales in Inventory
  5. A/P Turnover
  6. Days Sales in Purchases
  7. Operating Cycle
  8. Cash Cycle
  9. Total Asset Turnover
  10. Fixed Asset Turnover
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11
Q

Actvity Ratios

A/R Turnover

A

NCS/Avg A/R

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12
Q

Actvity Ratios

Day Sales Outstanding in Inventory Ratio

A

365 / Accounts Receivable Turnover Ratio

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13
Q

Actvity Ratios

Inventory Ratio

A

COGS / Avg Inv

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14
Q

Actvity Ratios

DSiI Ratio

A

365 / Inventory Ratio

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15
Q

Actvity Ratios

A/P Turnover

A

Net Purchases / Avg A/P

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16
Q

Actvity Ratios

Days Purchases in A/P

A

365 / Accounts Payable Turnover

17
Q

Actvity Ratios

Operating Cycle

A

Days Sales in A/R + Days Sales in Inventory

18
Q

Actvity Ratios

Cash Cycle

A

Operating Cycle - Days Purchaes in A/P

19
Q

Actvity Ratios

Total Asset Turnover

A

Net Sales/Avg TA

20
Q

Actvity Ratios

Fixed Assest TR

A

Net Sales/Avg P.P.E

21
Q

Solvency Ratios

A

Capital Structure Ratios

  1. Total Debt to Total Capital
  2. Debt to Equity
  3. LT Debt to Equity
  4. Debt to TA

Earnings Coverage

  1. Interest Earned
  2. Earnings to Fixed Charges
  3. Cash Flow to Fixed Charges
22
Q

Solvency Ratios

Total Debt to Total Cap

A

Total Debt / Total Captial

Measures the % of the firm’s capital structure provided by creditors.

When ratio is low, more capital is supplied by stock holders.

23
Q

Solvency Ratios

Debt to Equity Ratio

A

Total Debpt / Stockholder’s Equity

Direct comparison of firm’s debt load vs. its equity stake

Lower ratio means lower relative debt burden, thus better changes of repaying creditors

24
Q

Solvency Ratios

LT Debt to Equity

A

Long-term Debt / Stockholders’ Equity

Long-term debt burden carried by company per dollar of equity.

Low ratio - firm will have easier time raising new debt since its low debt load makes it a good credit risk

25
Q

Solvency Ratios

Debt to TA Ratio (Debt Ratio)

A

Total Liabilities / Total Assets

Total debt burden carried per dollar of assets

is the same as the Total Debt to Total Capital.

(Capital = Liabilties + Equity, which = Assets)

26
Q

Solvency Ratios

Times Interest Earned Ratio

A

EBIT / IE

Ability to pay interest on debt obligations.

Higher ratio = better financial position

27
Q

Solvency Ratios

Earnings to Fixed Charges Ratio

A

EBIT + IOL / IE + IOL + Div PS

28
Q

Solvency Ratios

CF to Fixed Charges Ratio

A

Pt OCF / IE + IOL + Div PS

29
Q

Fixed Charges

A

Interest Expense +

Interest Portion of Operating Leases +

Dividends on Preferred Stock

30
Q

Leverage Ratios

A
  1. DoL
  2. DOpL SPV
  3. DOPL %
  4. DFL SPV
  5. DFL %
31
Q

Leverage Ratios

Degree of Leverage (DL)

A

Pre Fixed Cost Income / Post Fixed Cost Income

32
Q

Leverage Ratios

Degree of Operating Leverage (DOL) SPV

A

CM / OI or EBIT

33
Q

Leverage Ratios

Degree of Operating Leverage (DOL) % Change

A

% Change OI or EBIT / % Change Sales

34
Q

Leverage Ratios

Degree of Fin Leverage (DFL) SPV

A

EBIT / EBT

35
Q

Leverage Ratios

Degree of Fin Leverage (DFL) % Change

A

% Change NI / % Change EBIT

36
Q

Effect of Ratio if > 1 and equal decreases in numerator & denominator?

A

Ratio Increases

Ratio decreases if vice versa

CMA Exam Part 2 (5 decks)

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