Finance - ROA

Question 2

What is the Return on Assets (ROA) Formula?

Answer 2

ROA = Profit Margin x Asset Utilization

Question 3

What is the formula for Profit Margin?

Answer 3

Net Income / Sales

Question 4

What is the formula for Asset Utilization

Answer 4

Sales / Total Assets

Question 5

What is Return on Invested Capital (ROIC)?

Answer 5

Net Operating Profit After Tax (NOPAT) / (Interest Bearing Debt + Stockholder Equity - Cash - Investments)

Question 6

What is Economic Value Added

Answer 6

NOPAT - (invested capital x WACC)

Question 7

How do you calculated Account Receivables Turnover?

Answer 7

Sales on account / average ((beg. bal. + end bal.) / 2)accounts receivables = Ratio:1

Question 8

How to calculate Day’s receivables

Answer 8

365 / Account Receivables Turnover

Question 9

How to calculate Accounts Inventory Turnover

Answer 9

COGS / Average Inventory (beg+end bal. / 2)

Question 10

How do you calculate Day’s inventories

Answer 10

365 / Accounts Inventory Turnover

Question 11

What is the Cash Conversion Cycle?

Answer 11

Day’s Inventory + Days Receivables - day’s Payables

Question 12

How do you calculate Day’s Payables Outstanding

Answer 12

365 / (COGS/Average Accounts Payable (beg+end bal / 2)