ECON

Question 1

What are the key roles of the World Bank, International Monetary Fund and the WTO

Answer 1

WB
POVERTY
-financial and technical assistance to developing countries around the world
- Reduce poverty

IMF
PROCESS
foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

WTO
RULES
- Rules, agreements, cross border commerce

Question 2

What are the components of OCI

Answer 2

Foreign Currency transaltion gains/losses

DOES NOT INCLDUE DIVIDENDS PAID

Question 3

Calculating basic EPS, how do you treat a stock dividend? Which shares do you include inthe denominator?

Answer 3

Stock dividend - apply directly, do not average it

Shares - common only

Question 4

Explain the treatment of undistributed profit under USGAAP vs IFRS

Answer 4

Deferred taxes must be recognized for undistributed earnings from an investment in an associate firm under U.S. GAAP.

Under IFRS, no deferred taxes are reported for undistributed earnings if the investor firm controls the sharing of profits and it is probable the temporary difference will not be reversed in the future

Question 5

How do you calculate the treasury stock method (diluted eps)

Answer 5

1. Calculate proceeds (Exercise price x options)
2. Calculate shares purchased with proceeds (Share price / proceeds)

Calculate additional shares needed (Difference in options outstanding - Shares purchased)

Question 6

Explain how to calculate CFO direct and indirect

Answer 6

Components of CFO:
Cash collected from customers, typically the main component of CFO.
Cash used in the production of goods and services (cash inputs).
Cash operating expenses.
Cash paid for interest.
Cash paid for taxes.

Direct, ignore Depreciation.
Indirect, add depreciation back in

Question 7

How do you calculate cash paid for a new asset?

Answer 7

cash paid for new asset = ending gross assets + gross cost of old assets sold − beginning gross assets

Question 8

Calculate Gross profit, Operating profit and net profit margin

Answer 8

Gross

Revenue - cogs
/
Revenue

Operating income (EBIT)
/
Revenue

NI
/
Revenue

Question 9

How do you recalculate a DTL or DTA based on a change of tax rate

Answer 9

new tax rate - old tax rate
/
old tax rate

x

original DTL / DTA