FSA Acronyme & fonctionnement Flashcards
1
Q
Increase in current asset
A
Deducted from net income
2
Q
Increase in current liabilities
A
Added to Net income
3
Q
Two types of constructing statement of Cash Frlows
A
Direct and indirect method
4
Q
RNOA
A
Return on net operating assets
5
Q
NOPAT
A
Net Operating Profit after tax
6
Q
NOA
A
Average Net Operating Assets
7
Q
NOPAT = ?
A
EBIT + Tax paid
8
Q
Non operating Return = ?
A
FLEV x SPREAD
9
Q
ROE = ?
A
Net Income / Shareholders’s Equity
10
Q
Current Ratio = ?
A
Current Assets including cash / Current liabilities
11
Q
Quick Ratio / Acid Test =
A
(Cash + Marketable Securities + Trade receivables) / Current liabilities
12
Q
Cash Ratio
A
(Cash + Marketable securities ) / Current liabilities
13
Q
Intervalle Current Ratio
A
[1,5 ; 2,5]
14
Q
Current Ratio [0 ; 1]
A
Wasteful
15
Q
If Current Ratio > 2,5
A
Wastefull accumulation of liquid ressources
16
Q
Working Capital = ?
A
Long term Capital (Sh & Long term Lia) - Fixed Assets (Non current assets)
17
Q
Working Capital Need = ?
A
Current Assets except cash - Current liabilities without interest bearing debt
18
Q
Net Cash = ?
A
Working capital - Working capital Need
19
Q
Criteria for current asset
A
Benefits within 3 years
20
Q
Criteria for non current assets
A
Benefits within more than 3 years
21
Q
Besoin en fonds de roulement (BFR)
A
Stock (M1 / March / Prod fini) + Créances d’exploitation - dettes d’exploitations
22
Q
RNOA = NOPAT / NOA
A
Desegregation of RONA = (NOPAT / Sales) x (Sales / NOA)
23
Q
Net operating profit margin = ?
A
NOPAT / Sales
24
Q
Net operating asset turn-over (NOAT) = ?
A
Sales / NOA
25
Emission d'actions en anglais
Issuance of stocks
26
Free cash flow = ?
Cash provided by operating activities - Capital expenditures - Cash dividends
27
Capital expenditures
Investments on PPE's ad intangibles
28
What is liquidity
The ability to pay obligations expected to become due within the next year
29
What does RNOA measures
How profitably the company deployed its assets to generate operating profits
30
NOPAT = Operating income x (1 - tax rate)
NOPAT = Operating income x (1 - tax rate)
31
ROS = ? Measures what ?
Return on sales
Profitability
Net profit / Sales
32
Asset turnover = ? Measures what ?
Sales / Assets
| Efficiency
33
Financial leverage = ? Measures what ?
Assets / Financial leverage
| Financial leverage
34
Cash conversion cycle = ?
Accounts receivable + Inventories - Accounts payable
35
Working capital T/O
Sales / Working capital need
36
a
a
37
Financial leverage = ?
Debt / Equity
38
What is the condition under which ROE will be increased by adding financial leverage ?
ROE is increased by adding financial leverage as long as RNOA is higher than the weighed average cost of capital
39
What is the logic of the Dupont Method (Classical question)
- The DuPont method decomposes the ROE in order to gain insights into the levers that are
driving the return on the capital invested by shareholders: margins, efficiency of the
assets and capital structure.
40
What does the ROS measures ? (Official answer)
ROS (profit margin):is a profitability indicator. Calculated as net income divided by
revenues. It measures how much out of every euro of sales a company eventually keeps in
earnings company’s ability to monitor its revenues in terms of pricing and volume, and
to control its costs.
41
What does the asset turnover measures ?
(asset turnover): operating efficiency indicator. Calculated as sales divided
by assets. It indicates the amount of sales generated for every euro's worth of assets
company’s efficiency in using its assets.
42
What does the leverage ratio measures ?
. Calculated as assets divided by shareholders’ equity.
Indicates the degree of indebtedness of a firm (“debt” broadly speaking including loans,
payables, bonds). An equity multiplier of 1 means the company has no debt and as the ratio
increases, the company becomes more indebted. Companies that show a high ROE with
little debt relative to equity are able to grow without large capital expenditures, allowing
the firm to borrow surplus cash and deploy it elsewhere.
43
What are the 3 components of the ROE Dupont analysis :
ROS x ROA x leverage ratio or ROS x ROA x Equity multiplier
44
What are the limitations of the traditional Dupont Method ?
- The assets include both operating assets and financial assets such as cash and marketable securities,
- Net income includes profit from operating activities, as well as interest expense and interest income
which are consequences of financing decisions.
- The financial leverage used by DuPont does not recognize the fact that a company’s cash and cash
equivalent are by nature “negative debt” because they can be used to pay down the debt in the balance
sheet.
45
Operating ROA = RNOA
Operating ROA = RNOA
46
Operating capital need
Working Capital Need
47
Equity multiplier = Financial leverage
Total Assets / Total Equity
48
Other name for Equity multiplier
Total Assets / Total Equity --> Financial leverage
49
How to compute the effective tax rate based on an income statement
Tax expense / Profit before tax
50
Net interest expense = ?
Interest expense - Interest income (logical)
51
Net interest expense after tax = ?
Net interest expense * (1- tax rate)
52
NOPAT = in exercices ?
Net Profit + Net interest expense after tax
53
Operating working capital = ?
(Current Assets without cash) - (Current liabilities without interest bearing liabilities)
54
Net non current assets = ?
(Non current assets) - (non interest bearing liabilities) - (minority interest)
55
NOA = in practice ?
Operating WC + net non current assets
56
Net Debt = ?
Total debt - cash & cash equivalents (Souvent Cash & marketable securities)
57
Net financial leverage = ?
Net debt / shareholder's equity
58
Effective interest tax rate after tax%
Net interest expense after tax / net debt
59
Spread % = ?
RNOA - effective interest rate after tax
60
Net financial leverage = ?
net debt / shareholder's equity
61
Ne pas confondre Net interest expense after tax ≠ Effective interest expense after tax
Bien que Effective interest rate after tax se calcule à partir de Net interest expense after tax
Ne pas confondre Net interest expense after tax ≠ Net interest rate after tax
Bien que Net interest rate after tax se calcule à partir de Net interest expense after tax
62
Question Statement of cash flows : Purchase of equipment quel type activité
Operating activities
63
Increase in-other non-current liabilities ?
Operating activities !
64
Decrease in deferred incomes taxes
Operating activities !
65
Increase in prepaid expenses ? Question Statement of cash flows :
Operating activities !
66
Question Statement of cash flows : Which base ?
Net income
67
Question Statement of cash flows : Which goal ?
Difference with cash
68
A deferred income tax is a liability recorded on a balance sheet resulting from a difference in income recognition between tax laws and the company's accounting methods. For this reason, the company's payable income tax may not equate to the total tax expense reported.
A deferred income tax is a liability recorded on a balance sheet resulting from a difference in income recognition between tax laws and the company's accounting methods. For this reason, the company's payable income tax may not equate to the total tax expense reported.
69
Short term debt = ?
Bank overdraft used for Net CASH
