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CFA Level 1 - Quantitative Methods > Financial Reporting Ratios > Flashcards

Financial Reporting Ratios Flashcards

1
Q

Current Ratio

A

Current Assets / Current Liabilities

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2
Q

Quick Ratio

A

(Cash + Marketable Securities + receivables ) / Current Liabilities

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3
Q

Cash Ratio

A

(Cash + Marketable Securities) / Liabilities

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4
Q

Defensive Interval

A

(Cash + Marketable Securities + receivables) / daily cash expenditure

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5
Q

Receivables Turnover

A

annual sales / average receivables

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6
Q

Inventory Turnover

A

COGS / average inventory

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7
Q

Payables Turnover Ratio

A

Purchases / average trade payables

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8
Q

days of sales outstanding

A

365 / receivables turnover

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9
Q

days of inventory on hand

A

365 / inventory turnover

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10
Q

Number of Days of Payables

A

365 / payables turnover ratio

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11
Q

Cash Conversion Cycle

A

days of inventory on hand + days of sales outstanding - number of days payables

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12
Q

Total Asset Turnover

A

Revenue/ average total assets

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13
Q

Fixed Asset Turnover

A

Revenue / average fixed assets

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14
Q

Working Capital Turnover

A

Revenue / average working capital

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15
Q

Gross Profit Margin

A

gross profit / revenue

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16
Q

Operating Profit Margin

A

= operating profit / revenue

= EBIT / net sales

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17
Q

Net Profit Margin

A

= net income / revenue

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18
Q

Return on Assets

A

= EBIT / Average Total Capital

= [net income + interest expense (1 - tax rate)] / average total assets

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19
Q

Debt-to-Equity Ratio

A

Total Debt / Total Equity

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20
Q

Total-Debt Ratio

A

Total Debt / Total Assets

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21
Q

Interest Coverage

A

EBIT / interest

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22
Q

Fixed Charge Coverage

A

(EBIT + lease payments) / (interest + lease payments)

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23
Q

Growth Rate (g)

A

Retention Rate * Return on Equity

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24
Q

Retention Rate

A

1 - (dividends declared/operating income after taxes)

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25
Q

DuPont Analysis

A

Return on Equity = (net income / sales)(sales/assets)(assets/equity)

= net profit margin * asset turnover * Equity Multiplier

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26
Q

Extended DuPont Analysis

A

ROE = (net income / EBT)* ( EBT/EBIT) * (EBIT / Revenue) *(revenue / average total assets) *( Average Total assets / Average Equity)

= tax burden * interest burden * EBIT margin * asset turnover * leverage

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27
Q

Basic EPS

A

=(net income - preferred dividends) / weighted average number of common shares outstanding

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28
Q

Diluted EPS

A

= ((net income - preferred dividends) + convertible preferred dividends + convertible debt interest * (1-t)) / (weighted average shares + shares from conversion of convertible preferred shares + shares from conversion of convertible debt + shares issuable from stock options)

= adjusted income available for common shares / weighted average common shares plus potential common shares outstanding.

29
Q

Straight Line Depreciation

A

(Cost - Residual Value) / useful life

30
Q

Double Declining Balance Depreciation

A

( 2 / useful life) * (cost - accumulated depreciation)

31
Q

Units of Production Depreciation

A

((Cost - salvage value) / useful life in units) * output units

32
Q

Debt to Capital

A

Total debt / ( total debt + total shareholders’ equity)

33
Q

Debt-To-Assets

A

Total debt / Total assets

34
Q

Financial Leverage

A

average total assets / average total equity

35
Q

Pretax Margin

A

EBT / revenue

36
Q

Operating ROA

A

= operating income / average total assets

= EBIT / average total assets

37
Q

Return on total capital

A

EBIT / average total capital

38
Q

Return on Equity

A

Net Income / Average Total Equity

39
Q

Return on Common Equity

A

= (net income - preferred dividends) / average common equity

40
Q

Free Cash Flow to the Firm

A

= net income + noncash charges + [ interest expense *(1-tax rate)] - fixed capital investments -working capital investment

= CFO + [interest expense*(1 - tax rate)] -fixed capital investment

41
Q

Free Cash Flow to Equity

A

CFO - fixed capital investment + net borrowing

42
Q

common size income statement ratios

A

income statement account / sales

43
Q

common size balance sheet ratios

A

balance sheet account / total assets

44
Q

common size cash flow ratios

A

cash flow statement account / revenues

45
Q

Coefficients of Variation sales

A

standard deviation of sales / mean sales

46
Q

Coefficients of Variation operating income

A

standard deviations of operating income / mean operating income

47
Q

Coefficients of Variation net income

A

standard deviation of net income / mean net income

48
Q

ending inventory

A

= beginning inventory + purchases - COGS

49
Q

FIFO COGS =

A

LIFO COGS - (ending LIFO reserve - beginning LIFO reserve)

50
Q

Straight-line depreciation

A

cost-salvage value / useful life

51
Q

Double Declining Balance

A

(2/useful life) * ( cost - accumulated depreciation)

52
Q

Units of production depreciation

A

[(original cost - salvage value) / life in output units]* output units in this period

53
Q

average age

A

accumulated depreciation / annual depreciation expense

54
Q

total useful life

A

historical cost / annual depreciation expense

55
Q

remaining useful life

A

ending net PP&E / annual depreciation expense

56
Q

income tax expense

A

taxes payable + delta(DTL) - delta (DTA)

57
Q

interest expense

A

(the marker rate at issue * the balance sheet value of the liability at the beginning of the period

58
Q

cash flow - to - revenue

A

CFO / net revenue

59
Q

cash return - on - assets

A

CFO / average total assets

60
Q

cash return-on-equity

A

CFO / average total equity

61
Q

cash - to - income

A

CFO / operating income

62
Q

cash flow per share

A

(CFO - preferred dividends ) / ( weighted average number of common shares)

63
Q

Debt Coverage

A

CFO / total debt

64
Q

interest Coverage

A

(CFO + interest paid + taxes paid) / interest paid

65
Q

reinvestment

A

CFO / cash paid for LT assets

66
Q

debt payment

A

CFO / cash paid for LT debt repayment

67
Q

dividend payment

A

CFO / dividends paid

68
Q

investing and financing

A

CFO / cash outflows from investing and financing activities

CFA Level 1 - Quantitative Methods (29 decks)

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