Midterm note Flashcards
trách nhiệm corporation
limited liability
decision of financing
stock, bond
CA
turn into cash in 12 months
level of liquidity giảm: cash -> AR -> inventory
CA - CL =
NWC
EBIT =
Revenue(Sales) - Cost - Selling expense - Depreciation expense
EBIT - Interest = EBT
NI (net income) =
EBT - Tax
OCF =
EBIT + Depreciation - Tax
Comparison of decision of investment and financing
investment: fixed assets
financing: bond, stock
Leverage Ratio
“Debt/Equity Ratio = value long term debt / value long term equity”
Debt/Equity = TD / TE = (TA - TE) / TE
Total debt ratio = (TA-TE)/TA
Equity multiplier=TA/TE=1+D/E
Times Interest Earned =
EBIT / Interest (đv là times)
Days’ Sales in inventory
or Days in inventory =
365 / Inventory turnover = 365 / (COGS/inventory) (đv là days)
Inventory turnover = Cost of Goods Sold / Inventory (đv là times)
Decrease days in inventory
Net Profit Margin ( đề cho EBIT, revenue, total assets)
Net income / Sales
(Revenue-Cost)/Revenue
Return on Assets (ROA)
Net income / Total assets
Return on Equity (ROE)
Net income / Total equity
Market Capitilization
Number of outstanding stocks x market value or price per share
vd: $88 per share x 33 million shares = $2,904 mill.
Future Value
one period case:
Present Value x (1 + r)
-> PV=FV(1+r)
Multiperiod case:
FV = PV x (1+r)^t
Annuity
Equal payment, equal interval for the “limited time”
equal cash flows occurring each time period over a fixed length of time
Perpetuity
Equal payment, equal interval “forever”
NPV =
- Cost + PV
(present value of the future cash flows minus the initial cost)
Outflow (năm đầu, initial investment)
Chỉ chấp nhận khi NPV>0
((Chấp nhận dự án khi rate of return>0 (SAI))
Có chữ “except”
chọn câu sai
Make investment decisions
based on CF “after taxes”
NWC
firm or company must invest cash in short term assets to produce finished goods
Opportunity cost
mất đi do chọn làm việc khác
Sunk cost
money already spent