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Equity Analysis > Equity Analysis Quiz > Flashcards

Equity Analysis Quiz Flashcards

1
Q

What is the purpose of Cash Flow from Operations (CFO)?

A

CFO measures the amount of money the company brings in from its business activities

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2
Q

What are the accounts under Reconcile Cash?

A

Depreciation & Amortization, Deferred Income Taxes, Share-based compensation, Gains/Losses on Sale of Assets, Special Changes/Restructuring, Other

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3
Q

What are the accounts under Changes in Working Capital?

A

Accounts Receivable, Inventories, Accounts Payable, Prepaid Expenses, Income Taxes, Other

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4
Q

What is the purpose of Cash Flows from Investing?

A

Cash flows from investing provides a view of what the company is spending its money on long-term assets and non-current assets

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5
Q

What is Capital Expenditure?

A

A measure of capital investment used in valuation of stocks (capex is a deduction from cash flows).

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6
Q

What are examples of cash flows from investing?

A

Purchase of fixed asset (deduction), Purchase of investment (deduction), Lending Money (deduction), Sale of fixed assets (addition), Sale of investment (addition), Collecting loans & Insurance (addition)

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7
Q

What accounts are under Cash Flow from Investing?

A

Sale or Purchase of Property, Sale or Purchase of Stock Investments, Sale or Purchase of Fixed Income (debt) Securities

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8
Q

What is the purpose of Cash Flow from Financing?

A

Cash Flow from financing indicates how a company funds from its operations (the net amount of funding) a company generates in a given time period (includes changes in accounts related to debt and equity)

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9
Q

What are examples of Finance Activities?

A

Payment of dividends, Issuance and repayment of debt, Issuance and repayment of equity, Proceeds of exercising stock options

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10
Q

How do companies raise capital?

A

By issuing debt and equity (reflected in cash flow statement)

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11
Q

Depreciation & Amortization is?

A

Added to Cash Flow Operation

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12
Q

Deferred Income Taxes is?

A

Added to Cash Flow Operations

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13
Q

Share-based Compensation

A

Added to Cash Flow Operations

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14
Q

Gains/Losses on Sale of Assets is?

A

Deducted if gain, Added if Loss

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15
Q

Special Charges/Restructuring?

A

Added to Cash Flow Operations

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16
Q

Other is (CFO)?

A

Added to Cash Flow from Operations

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17
Q

Accounts Receivable is?

A

Deduction increases Receivables, Added decreases

18
Q

Inventories

A

Deduction increases Inventories, Addition decreases

19
Q

Accounts Payable

A

Addition increases payable, deduction

20
Q

Prepaid Expenses

A

Deduction increases PE, addition decreases

21
Q

Income Taxes

A

Addition Increases taxes, Deduction decreases

22
Q

Other (WC)

A

Added or deducted back depending on item

23
Q

Cash flow from operations

A

Sum of all Working Capital

24
Q

What is Capital Expenditure?

A

Measure of Capital investment used in the valuation of stocks

25
Q

What is the purpose of Cash Flows from Investing?

A

To provide a view of what the company is spending its money on long-term assets and non-current assets

26
Q

What are examples of Cash Flows from Investing?

A

Purchase of fixed assets (deduction), Purchase of Investment (deduction), Lending Money (deduction), Sale of Fixed Assets (Added), Sale of Investment (added), Collecting loans + Insurance (addition)

27
Q

Capital Spending (CAPEX)

A

Sum of CF from Investing

28
Q

Sale or Purchase of Property

A

Sale (Cash Inflow), Purchase (Cash Outflow)

29
Q

Sale of Purchase of Stock Investments

A

Sale (Cash Inflow), Purchase (Cash Outflow)

30
Q

Sale or Purchase of Fixed Income (debt) Securities

A

Sale (Cash Outflow), Purchase (Cash Inflow)

31
Q

What is the purpose of Cash Flow from Financing?

A

Indicates how a company funds its operations (net amount of funding a company generates in a given time period)

32
Q

What are examples of financing activities?

A

Payment of dividends, Issuance and Repayment of debt and equity, and proceeds of exercising stock options

33
Q

How do companies raise capital?

A

By issuing debt or equity

34
Q

Net Short-Term Borrowing

A

Net Redeemer = Cash Outflow, Net Issuer = Cash Inflow

35
Q

Long Term Debt Issuance

A

Cash Inflow

36
Q

Long Term Debt Redemption

A

Cash Outflow

37
Q

Purchase of Treasury Stock

A

Cash Outflow (Share repurchasing)

38
Q

Issuance of Common Stock

A

Cash Inflow

39
Q

Common Stock Dividends

A

Cash Outflow

40
Q

FCF Formula

A

Cash Flow from Operations - Capital Spending

41
Q

What are the different deployments of FCF?

A

Dividend Payments, Growth Initiatives, M&A, Share Repurchase, Deleveraging

Equity Analysis (1 decks)

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