Mega Terms 2 Flashcards
receivables turnover
annual sales/average receivables
Days of sales outstanding
365/receivables turnover
Inventory turnover
cost of goods sold/average inventory
Days of inventory on hand
365/inventory turnover
Payables Turnover
Purchases/Average Trade Payables
Number of days of payables
365/payables turnover ratio
Total asset turnover
revenue/average total assets
Fixed asset turnover
Revenue/average net fixed assets
Working capital turnover
Revenue/Average working capital
Current Ratio
Current assets/Current liabilities
Quick Ratio
(Cash + Marketable Securites + Receivables)/ Current Liabilities
Cash Ratio
Quick ratio but take out receivables
Defensive interval
Cash + Marketable Securities + Recievables/ average daily expenditures
Cash Conversion Cycle
Days Sales Outstanding + Days of inventory on hand - number of days payable
Debt to capital
Total Debt/Total Shareholders’ Equity+Total Debt
Financial Leverage
Average total assets/Average total equity
Interest Coverage
Earnings before interest and taxes/Interest payments
Net Profit Margin
Net income/revenue
Operating profit margin
EBIT/Revenue
ROA
net income + interest expense(1- tax rate)/Average total assets
Operating return on assets
EBIT/average total assets
Return on equity
Net income/average total equity
Return on common equity
(net income - preferred dividends)/Average common equity
FCFF (Free Cash Flow to the Firm)
Cash flow from operations + [cash interest paid x (1 - tax rate)] - fixed capital investment - Working Capital Investment
FCFE (Free Cash Flow to Equity)
Cash flow from operations - fixed capital investment + net borrowing
Common-size income
Account/sales
Common-size balance sheet
Account/total assets
Common0size cash flow
Cash flow statement/revenues
Original DuPont
ROE = (net profit margin)(asset turnover)(leveraged ratio)
Extended DuPont
ROE = (net income/EBT)(EBT/EBIT)(EBIT/Revenue)(revenue/total assets(total assets/total equity)
Basic EPS
(Net income - preferred dividends)/(weighted average number of common shares outstanding)
Diluted EPS
[net income - preferred dividends] + [convertible preferred dividends] + (convertible debt interest)(1-t)/(weighted average shares) + (shares from conversion of conv. pfd. shares) + (shares from conversion of conv. debt) + (shares issuable from stock options)
CV sales
The standard deviation of sales/mean sales
CV operating income
standard deviation of operating income/mean operating income
CV net income
standard deviation of net income/mean net income
Ending inventory
Beg inventory + purchases - COGS
FIFO Cogs
LIFO Congs - (ending LIFO reserve - beginning LIFO)
DDB Depreciation
(2/useful life)(cost - accomulated depreciation)
Average Age
Accumulation depreciation/annual depreciation expense
Total Useful Life
Historical cost/annual depreciation expense
Remaining Useful life
Ending net PP&E/Annual depreciation expense
Income Tax Expense
Taxes Payable + ChangeDTL - ChangeDTA
Cash flow to revenue
CFO/net revenue
Cash return on assets
CFO/Average Total Assets
Cash-to-income
CFO/Operating Income
Cash flow per share
CFO - preferred dividends/weighted average number of common shares
Debt Coverage
CFO/total debt
Interest coverage
CFO + interest paid + taxes paid/interest paid
Reinvestment coverage
CFO/Cash paid for long-term assets
Operating Activities (Inflows)
Inflows (Cash collected from customer, interest, and dividends received, and sale proceeds from trading securities)
Operating Activities (Outflows
Outflows (Cash paid to employees and suppliers, cash paid for other expenses, acquisition of trading securities, interest paid of debt of leases, taxes paid)
Investing Activities (Inflows)
Sales proceeds from fixed assets, debt and equity investments, and principal received from loans made to others
Investing Activities (Outflows)
Acquisition of fixed assets, debt and equity investments, and loans made to others
Financing Activities (Inflows
Principal amounts of debt issued and proceeds from issuing stock
Financing Activities (Outflows)
Principal paid on debt or leases, payments to reacquire stock, dividends paid to shareholders
Income Statement
Net Sales - Cost of Goods Sold | Gross Profit - Operating expense | EBIT - Interest | Earnings Before taxes - Taxes +/- below the line items adjusted for tax | Net come - Preferred dividend | Income available to common
Effective Tax Rate
Income tax expense/pretax income
Net Income
Revenue - expenses
new shares (treasury stock) - How many new shares from the use of options or warrants
((avg. market price - excise price)/avg. market price)* number of shares covered by options/warrants
Gross Profit Margin
Gross Profit/Revenues
Working Capital
Current Assets - Current Liabilities
Return on total Capital
EBIT/Average total capital
Retention rate
1-dividends declared/net income available to common
