F2 (Notes, SEC Reporting, Ratios) Flashcards

1
Q

Notes to FS disclosures (relevant to decision makers & integral part of FS)

A
  • change in SE
  • contingency
  • off BS contracted obligations
  • pension plan
  • post BS but before FS issued
  • related party
  • significant est/risk
  • products, customers’ geography
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2
Q

Firm PC’s:

A
  • legally enforceable agreements to purchase a specific amount of goods at some time in the future
  • must be disclosed in FS or notes
  • if price > MV and expected that loss will occur when purch is made, the loss should be recog’d at time of decline in price (conservatism)
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3
Q

disclosures for depreciable assets and DE should be made in FS or notes:

A
  • DE for period
  • balance of major classes of depreciable assets
  • AD allowances y classes/total
  • methods used by major classes in computing DE
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4
Q

key financial ratios are:

A
  • liquidity ratio (WC, QR, CaR)
  • activity ratio (AR TO, A TO, Inv TO, days sales AR & Inv TO in days, days in Inv, AP TO, etc)
  • coverage ratio (DER, times int earned, Op CF/total debt, equity multiplier)
  • profitability ratios (not key); return on sales, ROA, ROE, NPM
  • investor ratios (EPS, PER, div payout ratio)
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5
Q

liquidity ratios:

A
  • WC = CA - CL
  • WC ratio = CA/CL
  • QR (acid) = CA-inv/CL [no PPD/inv]
  • CaR (most liquid) = (CA - inv - AR)/CL
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6
Q

Activity ratios:

A
  • AR TO = NS/ avg AR
  • AR TO days = 365/AR TO
  • days sales in AR = EB AR/(NS/365)
  • Inv TO = COGS/avg Inv
  • Inv TO days = 365/inv TO
  • days in Inv (#days to sell) = EI/(COGS/365)
  • AP TO = COGS/avg AP
  • days payable o/s = EB AP/(COGS/365)
  • Cash conversion cycle = days in AR + days in inv + days in AP (lower the better)
  • operating cycle = AR TO days + inv TO days (less is better)
  • WC TO = NS/avg WC
  • total A TO = NS/avg A
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7
Q

Activity ratios:

A
  • AR TO = NS/ avg AR
  • AR TO days = 365/AR TO
  • days sales in AR = EB AR/(NS/365)
  • Inv TO = COGS/avg Inv
  • Inv TO days = 365/inv TO
  • days in Inv (#days to sell) = EI/(COGS/365)
  • AP TO = COGS/avg AP
  • days payable o/s = EB AP/(COGS/365)
  • Cash conversion cycle = days in AR + days in inv + days in AP (lower the better)
  • operating cycle = AR TO days + inv TO days (less is better)
  • WC TO = NS/avg WC
  • total A TO = NS/avg A
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8
Q

Profitability ratios:

A
  • return on sales = EBIT/NS
  • ROA = NI/avg A
    (DuPont same thing; NPM * total A TO)
  • ROE (ROCE) = NI/ SE
  • NPM = NI/NS
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9
Q

Coverage Ratios:

A
  • DER = L/SE
  • DAR = L/A
  • times int earned (int coverage ratio) = (EBIT + int exp)/int exp
  • op CF/L = op CF/L
  • Equity multiplier = A/E
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10
Q

Investor ratios:

A
  • EPS = (NI-PD)/WACSO
  • PER = price per share/ basic EPS
  • div payout ratio = CD/NI
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11
Q

in notes (1st/2nd), summary of significant AP’s should include:

A

methods, policies, & criteria (LIFO, FIFO, SL)

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12
Q

market cap = CS o/s * mkt price:

A

Large accel > 700M
Accel > 75 < 700
small < 75

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13
Q

filing deadlines for 10K & 10Q:

A

[10K]
60-75-90
(large, accel, other)

[10Q]; unaudited & reviewed
40-40-45
(large, accel, other)

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14
Q

Form 8K & 3-4-5:

A

8K = major corp event reporting (acquisitions/disposals, change in sec’s, change in accountants/FS’s, and changes in corp governance/mgt.

3-4-5 = to be filed by directors, officers, or beneficial owners for more than 10% of class of ES’s of a registered company

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