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CMA Part 2 > Formulas > Flashcards

Formulas Flashcards

1
Q

Times Interest Earned

A

Net Income before interest and taxes / Interest Expense

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2
Q

Net Working Capital

A

Current Assets - Current Liabilities

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3
Q

Current Ratio

A

Current Assets / Current Liabilities

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4
Q

Quick Ratio (Acid-Test Ratio)

A

(Cash + Marketable Securities + AR) / Current Liabilities

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5
Q

Cash Ratio

A

(Cash + Marketable Securities) / Current Liabilities

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6
Q

Current Cash Debt Coverage Ratio

A

Cash Provided from Operations / Avg Current Liabilities

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7
Q

Debt to Equity

A

Total Liabilities / Total Stockholders’ Equity

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8
Q

Long-term Debt to Equity

A

Long-term Liabilities / Stockholders’ Equity

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9
Q

Debt to Total Assets

A

Total Liabilities / Total Assets

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10
Q

Fixed Charge Coverage (Earnings to Fixed Charges Ratio)

A

(EBIT + Fixed Charges) / (Fixed Charges + Interest Expense)

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11
Q

Interest Coverage (Times Interest Earned Ratio)

A

EBIT / Interest Expense

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12
Q

Free Cash Flow

A

Cash Provided by Operations

  • Capital Expenditures
  • Cash Dividends
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13
Q

Degree of Operating Leverage (DOL)

A

% Change in EBIT / % in Sales

or

Contribution Margin / EBIT

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14
Q

Degree of Financial Leverage (DFL)

A

% Change in Net Income / % Change in EBIT

or

EBIT / EBT

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15
Q

Degree of Total Leverage

A

DOL x DFL

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16
Q

Inventory Turnover Ratio

A

COGS / Avg Inventory

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17
Q

Days Sales in Inventory

A

365 Days / Inventory Turnover

or

Avg Inv / (COGS / 365)

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18
Q

AR Turnover Ratio

A

Credit Sales / Avg Gross AR

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19
Q

Days Sales in Receivables

A

365 Days / AR Turnover

or

Avg Gross AR / (Credit Sales / 365)

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20
Q

AP Turnover Ratio

A

Credit Purchases / Avg AP

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21
Q

Days Purchases in AP

A

365 days / AP Turnover

or

Avg AP / (Credit Purchases / 365)

22
Q

Operating Cycle

A

Days Sales in AR + Days Sales in Inventory

23
Q

Cash Cycle

A

Days Sales in AR + Days Sales in Inventory - Days Purchases in AP

or

Operating Cycle - Days Purchases in AP

24
Q

Asset Turnover

A

Net Sales / Avg Total Assets

25
Q

Fixed Asset Turnover

A

Net Sales / Avg Net PPE

26
Q

Gross Margin

A

Gross Profit / Net Sales

27
Q

Operating Profit Margin

A

Operating Income / Net Sales

28
Q

Profit Margin

A

Net Income / Net Sales

29
Q

Earnings before Interest, Taxes, Depr, & Amort Margin

EBITDA

A

EBITDA / Net Sales

30
Q

Return on Assets

A

Net Income / Avg Total Assets

31
Q

Return on Equity

A

(Net Income - Preferred Dividends) / Avg Common Stockholders’ Equity

32
Q

Market/Book Ratio

A

Stock Price / Book Value per Share

33
Q

Price/Earnings Ratio (P/E)

A

Stock Price / Earnings per Share

34
Q

Earnings Per Share (EPS)

A

(Net Income - Preferred Dividends) / Weighted Avg Common Shares Outstanding

35
Q

Diluted EPS

A

(Net Income - Preferred Dividends) / Diluted Weighted Avg Common Shares Outstanding

36
Q

Earnings Yield

A

EPS / Market Price per Share

37
Q

Dividend Yield

A

Dividend per share / Market Price per Share

38
Q

Dividend Payout Ratio

A

Dividends / Earnings

39
Q

DuPont Model of ROA

A

(Net Income / Sales) x (Sales / Avg Total Assets)

or

Net Profit Margin x Total Asset Turnover

40
Q

DuPont Model on ROE

A

(Net Income / Avg Total Assets) x (Avg Total Assets / Avg Common Shareholders’ Equity)

or

ROA x Financial Leverage

*Financial Leverage = Assets / Equity

41
Q

Sustainable Growth Rate (SGR)

A

ROE x (1 - Dividend Payout Ratio)

42
Q

Accounting Profit

A

Accounting Revenues - Accounting Expenses

43
Q

Rate of Return

A

(Capital Appreciation + Income) / Investment

or

[(Investmentt+1−Investmentt)+Income]÷Investmentt

44
Q

Average Collection Period

A

Weighted Avg of times people pay

45
Q

Average Balance in Receivables

A

Avg Daily Sales x Avg Collection Period

46
Q

Formula to calculate not taking a discount

A

[(Discount %) / (100% - Discount %) x (Days in Year)] / (Total Payment Period - Discount Period)

47
Q

Margin of Safety

A

Current Sales - Breakeven Sales

or

Margin of Safety / Current Sales = Margin of Safety %

48
Q

Contribution Margin

A

Total Sales - Variable Costs

49
Q

Standard Deviation:Expected Return Ratio

A

(Standard Deviation/Expected Return):(Expected Return/Expected Return)

50
Q

Coefficient of Variation

A

Standard Deviation / Expected Return

CMA Part 2 (4 decks)

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