Formulas

Question 1

Receivables Collection Period

Answer 1

365/(Sales/Avg AR)

Question 2

ROI

Answer 2

Income/Invested Capital

Question 3

Market Size Variance

Answer 3

(actual mkt size in units - expected)*budg mkt share % * WA budg CM/unit

Question 4

Profitability Index

Answer 4

PV Net Cashflow/PV Net initial investemnt

Question 5

Cash conversion cycle

Answer 5

inventory conversion period+Receivables collection period-payable deferral period

Question 6

Effective APR

Answer 6

((1+Effective Periodic Rate)^# of periods) - 1

Question 7

Effective Interest Rate

Answer 7

Interest paid/Net proceeds of loan

Question 8

Dividend Discount Model

Answer 8

Price(t)=Div(t-1)/R-G

Question 9

Times Interest Earned

Answer 9

EBIT/Total interest expense

Question 10

EOQ

Answer 10

SQUARE ROOT OF: (2Annual salesOrder cost)/Carry cost per unit

Question 11

Costs to be used in FIFO EU

Answer 11

Added during period

Question 12

PE Ratio

Answer 12

Po/E1

Question 13

Unemployment Rate Formula

Answer 13

unemployed/Total Labor Force*100

Question 14

Inflation Rate

Answer 14

CPIo-CPI(last)/CPI(Last)*100

Question 15

FIFO EU

Answer 15

BEG inventory TO BE COMPLETED - Beginning inv + Completed +Ending % Completed

Question 16

Inventory Turnover

Answer 16

COGS/Avg Inventory

Question 17

Residiual Income

Answer 17

NI-Required Return

Question 18

CAPM

Answer 18

RF + (B X (MR-RF))

Question 19

APR of Quick PMT Discount

Answer 19

(360/pay period-Disc Period)X(Discount%/100-Disc%)

Question 20

Discounted Cash Flow

Answer 20

(DIV1/Price0) +G

Question 21

WA EU

Answer 21

Completed + Ending % Completed

Question 22

Sales Volume Variance

Answer 22

(Actual Sold-Budg Sold)* Std CM/Unit

Question 23

Degree of FL

Answer 23

% Change in EPS/% Change in EBIT

Question 24

Market Share Variance

Answer 24

(Actual mkt share %-Budg)* actual industry units * WA budg cm/unit

Question 25

Return on Equity (not in book)

Answer 25

Profit Margin * Asset Turnover *(assets/equity)

Question 26

Reorder Point

Answer 26

Safety Stock + (Lead time * Sales during lead time)

Question 27

Nominal Interest Rate

Answer 27

Real RF+Expected Inflation

Question 28

Degree of OL

Answer 28

% Change in EBIT/%Change in Sales

Question 29

BYRP

Answer 29

YTM+Risk Premium

Question 30

Quick (Acid) Ratio

Answer 30

Cash + Mar. Securities + Receivables/Current Liab

Question 31

Costs to be used in WA EU

Answer 31

Beginning + Added during period

Question 32

Inventory Conversion Period

Answer 32

365/(COGS/Avg Inv)

Question 33

Asset Turnover

Answer 33

Sales/Avg total assets

Question 34

ROA

Answer 34

NI/Avg total assets

Question 35

Payment Deferral Period

Answer 35

365/(GOGS/Avg AP)

Question 36

Multiplier Effect

Answer 36

1/MPS OR 1/(1-MPC)

Question 37

Real GDP (price index?)

Answer 37

Nominal GDP/GDP Deflator *100

Question 38

IRR

Answer 38

Investment/CF

Question 39

Factoring A/R

Answer 39

Net Cost**/Avg Amount Advanced

** Net of interest, fees, and expenses saved

Question 40

PEG Ratio

Answer 40

P0/E1/G

Question 41

Frictional Unemployement

Answer 41

Workers being laid off…. changing jobs

Question 42

Structural Unemployment

Answer 42

Change in tech or Skills

Question 43

Cyclical Unemployment

Answer 43

Due to recession, poor GDP