Financial Statements

Question 1

Operating Leverage

Answer 1

Fixed costs/(Fixed costs+variable costs)

Question 2

Treasury Stock

Answer 2

Common Stock-Shareholders equity

Question 3

Equity Value

Answer 3

“Market Capitalization”=Share Price x Fully Diluted Shares Outstanding

Question 4

NOPLAT

Answer 4

NOPLAT: Net operating profit less adjusted taxes = NOPAT Net operating profit after tax

NOPAT = EBIAT earning before interest after taxes

Question 5

10Q

Answer 5

fewer disclosures, company is not required to include any information about officers, directors or 5% beneficial shareholders

Question 6

DEF14A

Answer 6

proxy statement. disclosure sent to shareholders to imform them of matters tht shreholders will vote upon t annual meeting

must be mailed at least 20 days prior to vote or posted onlne 40 days prior

Question 7

F3

Answer 7

Initial Statement of Beneficial Ownership, must be filed within 10 days of action that caused the person to become a corporate insider

Question 8

Yield relationships

Answer 8

Question 9

Debt Service coverage Ratio

Answer 9

amount of cash flow available to meet annual interest and principal payments on debt, including sinking fund payments.

In general, it is calculated by:

Debt-Service Coverage Ratio (DSCR) = Net operating income/ total debt service

Question 10

Debt to EBITDA Ratio

Answer 10

Definition of ‘Debt/EBITDA’

A measure of a company’s ability to pay off its incurred debt. This ratio gives the investor the approximate amount of time that would be needed to pay off all debt, ignoring the factors of interest, taxes, depreciation and amortization.

Debt/EBITDA

Question 11

Leading Indicators

Answer 11

Definition of ‘Composite Index of Leading Indicators’

An index published monthly by the Conference Board used to predict the direction of the economy’s movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy. These 10 components include:

1. the average weekly hours worked by manufacturing workers
2. the average number of initial applications for unemployment insurance
3. the amount of manufacturers’ new orders for consumer goods and materials
4. the speed of delivery of new merchandise to vendors from suppliers
5. the amount of new orders for capital goods unrelated to defense
6. the amount of new building permits for residential buildings
7. the S&P 500 stock index
8. the inflation-adjusted monetary supply (M2)
9. the spread between long and short interest rates
10. consumer sentiment

Question 12

Depreciation

Answer 12

part of operating expense

Question 13

structure of 10 K

Answer 13

1. Part I: business overview
2. Part II: numbers and analysis
3. Part III: important people
4. Part IV: exhibits and schedules

Question 14

measurement for efficiency of selling inventory

Answer 14

DIH and inventory turns (COGS/Inventory)