Fundamental Analysis Flashcards
Formula for Net Worth
Assets - Liabilities = Net Worth
What are current assets and liabilities?
Assets and Liabiliites that are due within 1 year
3 categories of current assets?
Cash and securities
Accounts Receivable
Inventory
4 categories of current liabilities
Accounts Payable
Wages Payable
Taxes Payable
Interest Payable
Net Working Capital Formula
Current Assets - Current Liabilities
What is the difference between the acid test ratio and the current ratio?
Acid test subtracts inventory and prepaid expenses from current assets so:
Current assets - inventory& prepaid expenses/current liabilities
Formula for accounts receivable turnover ratio
Annual Sales/Year end accounts recievalbe
Inventory turnover ratio
Annual Cost of good sold/
year end inventory
What is goodwill/
excess purchase price over book value; used to cover brand value, customer base, etc
Formula for book value per common share
# common shares outstanding
Formula for net tangible asset value per bond
# of $1000 par bonds outstanding
Operating margin of profit
operating profit/net sales
bond interest coverge
total operating & non-operating income/bond interest expense
net profit
net income after tax/net sales
Return on assets
net after tax income/total tangible assets
