Pass Bec Flashcards
Current Ratio Formula?
Current Assets/Current Liabilities
Quick Ratio Formula?
Current Assets- Inventory & Prepaids/ Current Liabilities
Inventory Turnover Formula
Cost of Goods Sold/ Average Inventory (Beg Inv + End Inv)/2
Receivable Turnover
Net Credit Sales / Average AR (Beg AR + End AR)/2
Net Present Value
This compares the present value of the cash from the project to the initial cash investment in the project.
If the NPV is zero or positive, then the project is economically feasible
Components of COSO
Governance and culture
Strategy and objective-setting
Performance
Review and revision
Information, communication, and reporting
Oligopoly
Where a small number of sellers selling similar or differentiated products. Entry to the market is restricted. Each seller is large enough to influence the market prices.
A “cartel” is a group of firms that conspire together to fix prices
SWOT Analysis
Strength
Weakness
Opportunities
Threats
Return on Assets
Net Income/ Total Assets
Gateway
A connection that connects two dissimilar networks
Monopolistic Competition
Large number of small producers of differentiate products
PEST Analysis
Political, economic, social, and technology
Call Option
Give the holder the right to buy an asset for a specified exercise price (also strike price) on or before a specified expiration date
WAN
Wide area networks are networks that cover large geographic areas, such as a national network
XML
Extensible markup language is a protocol for encoding documents in a machine readable form
HTML
Hypertext markup language is a language for web pages
TCP/IP
Transmission control protocol/internet control is a transmission protocol of the internet
XBRL
Extensible business reporting language is a protocol for encoding and tagging business and accounting specific information in electronic form
FLP
File transfer protocol is a protocol used to transfer files from a client to a server
Rollback and recovery method of backup
When transactions are backed up as they occur, but there are also “snapshots” backed up so that backup can roller back to a certain time period
Mirroring
A method of backup that backs up an exact copy to multiple sites
Biometric controls
Fingerprint scanners that are used instead of passwords
Strong passwords
Has at least 8 characters, and uses both upper and lowest case letters
File attributes
Restrict the read/write/edit capabilities of a record
Social engineering
A set of techniques used by a fraudster to get sensitive information from employers. The distinction is getting information from people instead of actually hacking computer systems
4 electrical systems risks
Failure or outage
Reduce voltage (brownout)
Spike and surges
Electromagnetic interference
Clear text or plaintext
Text that can written or understood versus something like computer language
Symmetric Encryption
Using a single algorithm to encrypt or decrypt
How does a ditial certificate work?
Providing electronic identification and verification of a message
How does a asymmetric encryption work?
By using two paired algorithms to encrypt and decrypt text
Secure internet transactions
Made possible by 2 main security protocols
SSL (Secure sockets layer)
S-HTTP (Secure hypertext transport protocol)
Ciphertext
Scrambled text that cannot be understood without using an algorithm and key
Derived Demand
The demand for a good or service that results because it is an input needed in order to provide another good or service for which there is demand.
Average prosensity to consume (APC)
The percent of disposable income spent on consumable goods.
Average prosensity to save (APS)
The percent of disposable income saved
What happens on a Supply Curve during a perfectly competitive market and why?
It will be upward sloped because the firm will provide more goods only if the price is increased to accommodate increasing costs.
What direction would the supply curve shift inward?
Left
What is a leakage? What are examples of leakages?
Income used for purpose other than domestic consumption.
Example:
Savings
Taxes
Payment for imports
Marginal Propensity to consume
Measures the change in spending as the percentage of change in disposable income
Capital Asset Procing Model (CAPM)
Required Rate of Return (RFR) + Beta (Expected rate of return(ERR) - RFR)
RFR + β(ERR- RFR)
What is the P/E for share common stock?
Price/Earnings= Market price/ Earnings per share (EPS)
Both values are per share basis and the resulting calculation shows the relationship between the price of the stock in the market and the earnings for each share of stock
Effective Interest Rate (EAR)
(1 + r/m)^m -1
R = stated interest rate
M= compounding frequency
Price-earnings ratio
(Market Price Per Share)/(Annual Earnings per share)
What accounts for the difference between the stated rate and the effective annual rate of a loan?
The Frequency of compounding
