Exam 1 Flashcards
Sections of Cashflow Statement
Operating
Investing
Financing
four building blocks of analysis
- Liquidity/Efficiency
- Solvency
- Profitability
- Market Prospect
Horizontal analysis (tools of analysis)
Comparison of financial condition and performance across time
Vertical analysis
Comparison of financial condition and performance to a base amount
Ratio analysis
measurement of key relations between financial statement items
Liquidity & Efficiency ratios
Current ratio
Acid-test ratio
Accounts receivable turnover
Inventory turnover
Days sales uncollected
Days’ sales in inventory
Total Asset Turnover
Solvency Ratios
Debt Ratio
Equity Ratio
Debt-to-equity ratio
Times Interest Earned
Current ratio
Current Assets / Current Liabilities
Acid-Test ratio
(Cash + Short-Term Investments + Current Receivables) / Current Liabilities
Accounts Receivable turnover
Net Sales / Avg. Accounts Receivable, net
Inventory turnover
COGS / Avg. Inventory
Days’ Sales Uncollected
(Accounts receivable, net / Net Sales) X 365
Days’ sales in inventory
(Ending Inventory / COGS) X 365
Total asset turnover
Net Sales / Avg. Total Assets
Manufacturing cost (or Product costs)
Direct Material + Direct Labor + Factory Overhead
Period Costs
Selling and General administrative expenses
Prime Costs
Direct Materials & Direct Labor Costs
Conversion Costs
Direct Labor & Factory Overhead
Cost of Goods Manufactured (how to get)
Total Manufacturing Costs + Beg. WIP inv. - End WIP inv.
COGS (how to get)
Finished Goods Inv., Beg. + COGM/P - Finished Goods Inv., End
COGS Full formula
DM used
+DL
+FO
——–
=TMC
+Beg. WIP
-End WIP
——–
=COGM
+Beg. FG
-End FG
——–
COGS
Debt Ratio
Total Liabilities / Total Assets
Equity Ratio
Total Equity / Total Assets
Debt-to-equity Ratio
Total Liabilities / Total Equity
Times Interest Earned
Income before interest expense and income tax expense / Interest Expense
