Formulas

Question 1

Total borrowings

Answer 1

Amount Needed / (1 - Stated Rate)

Question 2

Effective Rate w. Comp Balance

Answer 2

Stated Rate / (1 - Comp Balance %)

Question 3

Free Cash Flow

Answer 3

Operating CF - Net Capital Expenditure - Net Change in WC

Question 4

Market Risk

Answer 4

(Rm- Rf)

Question 5

Security Risk

Answer 5

Beta(Rm - Rf)

Question 6

DOL

Answer 6

%change EBIT / %change Sales

Question 7

DFL

Answer 7

%change EPS / %change EBIT

Question 8

DTL

Answer 8

%change EPS / %change Sales

Question 9

Dividend Growth Model

Answer 9

(Dividends/Share Next Year) / (Discount Rate - Growth Rate)

Question 10

Required Rate of Return (cs)

Answer 10

(Dividends/Share Next Year) / (current stock price/share) + Growth Rate

Question 11

Dividend Payout Ratio

Answer 11

Dividend/Share / EPS

Cash Dividend / NI

Question 12

Dividend Yield

Answer 12

(Dividend/Share) / (Market Price/Share)

Question 13

Times Interest Earned Ratio

Answer 13

EBIT / Interest Expense

Question 14

A/R Turnover

Answer 14

Net Credit Sales / Avg A/R

Question 15

Days’ Sales in Receivables

Answer 15

Ending A/R / (Net Credit Sales/days in year)

Question 16

Inventory Turnover

Answer 16

COGS / Avg Inv

Question 17

Days’ Sales in Inv

Answer 17

Ending Inv / (COGS/days in year)

Question 18

A/P Turnover

Answer 18

COGS / Avg A/P

Question 19

Avg Payable Period

Answer 19

Ending A/P / (COGS/days in year)

Question 20

Not taking discount

Answer 20

(Discount% / 100 - discount%) *
(Days in year / (total payment period - discount period))

Question 21

EUP Weighted Avg Method

Answer 21

Total Units Completed + (Ending WIP * % completed)

Question 22

Weighted Avg Cost Per EUP

Answer 22

(Beg WIP + Current period costs) / weight avg EUP

Question 23

EUP Under FIFO

Answer 23

(Beg. WIP * % left to complete)
+ Units started and completed
+ (End WIP * % completed)

Question 24

FIFO Cost / EUP

Answer 24

Current Period Costs / FIFO EUP

Question 25

ROI

Answer 25

(Operating income / sales) * (Sales / avg invested capital)

Question 26

Units started and completed

Answer 26

Units transferred out
- bwip

Or

Units started
-ewip