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Yaegar BEC > Performance Measure Equations > Flashcards

Performance Measure Equations Flashcards

1
Q

ROA equation

A

ROA = Asset turnover x profit margin on sales

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2
Q

Residual income equation

A

Residual income = net income - interest on investment

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3
Q

Interest on investment equation

A

Interest on investment = required rate of return x invested capital

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4
Q

Economic profit equation

A

Economic profit = accounting profit - cost of capital

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5
Q

NOPAT

A

Net operating profit after taxes

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6
Q

Economic value added (EVA) equation

A

EVA =
net operating profit after taxes (NOPAT) -
(total assets - current liabilities) x WACC

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7
Q

TA

CL

A

Total assets

Current liabilities

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8
Q

Free cash flow equation

A

Free cash flow =
NOPAT + depr. Or/amortization - capital expend
. - change in working capital requirements

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9
Q

6 items in the current assets section of the consolidated balance sheet

A 
Cash
Short term investments
Receivables
Inventories
Other current assets
   Total current assets
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10
Q

8 items under property and equipment on the consolidated balance sheet

A 
Land
Buildings
Furniture, fixtures and equipment
Leasehold improvements
Construction in progress
Capital leases
Less: accumulated depreciation
  Net property in equipment
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11
Q

Deferred revenue and deferred income taxes are…

A

Current liabilities

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12
Q

Stockholder’s equity on consolidated balance sheet 7 parts

A 
Common stock
Paid in capital
Retained earnings
Accumulated other comprehensive loss
Unearned compensation
Treasury stock
Total stockholder's equity
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13
Q

Consolidated earnings statement Home Depot 20 lines

A 
Net sales
Cost of merchandise sold
Gross profit 
Operating expenses
Selling and store operating
Preopening
General and administrative 
Total operating expenses
Operating income
Interest income
    Interest and investment income
    Interest expense
       Interest net
    Earnings before provision for income taxes
Provisions for income taxes
    Net earnings

Weighted average common shares
Basics earnings per share
Diluted weighted average common shares
Diluted earnings per share

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14
Q

ROI 3 equations

A

1 Net income/avg. total assets

2 (Net sales/avg. total assets) x (net income/net sales)

3 Total asset T/O x profit margin

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15
Q

Equation for operating income 8

A 
Gross sales
- sales discounts
- sales returns and allowances
= net sales
- COGS
= GM
- oper. Exp.
= oper. Inc.
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16
Q

Common stockholder’s equity equation 5

A 
Total SHE
- P/S par value
- P/S Dividends
- P/S Liq. Premium
= Common stockholder's equity
17
Q

COG Purchased equation 6

A 
Gross Purchases
- Purchase Disc.
- Purchase R+A
= Net Purchases
\+ Freight in
= COG Purchased
18
Q

COGS equation 5

A 
Beg. Inventory
\+ COG Purchased
= COGAS
- End Inventory
= COGS
19
Q

Gross margin equation

A

Gross margin = gross profit/net sales

20
Q

Profit margin equation

A

Profit margin = Net income/net sales

21
Q

EBIT AKA Operating profit margin

A

EBIT = operating profit/net sales

22
Q

ROA AKA Return on Investment equation

A

ROA = net income/average total assets

23
Q

Average total assets equation

A

Average total assets = (ending total assets + beginning total assets)/2

24
Q

Return on equity equation

A

Return on equity = Net income/ average common stockholder’s equity

25
Q

Average Stockholder’s Equity Equation

A

Average Stockholder’s Equity = (ending SE + beginning SE)/2

26
Q

Dividend payout ratio

A

Dividend payout ratio = cash dividend per common share/EPS

27
Q

Receivables turnover equation

A

Receivables turnover = net credit sales/avg. A/R

28
Q

Average collection period equation

A

Average collection period = 365/(A/R turnover)

29
Q

Inventory turnover

A

Inventory turnover = COGS/Average Inventory

30
Q

Average inventory

A

Average inventory = (ending inventory + beginning inventory)/2

31
Q

Number of days’ sales in inventory

A

Number of days sales in inventory = 365/inventory turnover

32
Q

Total asset turnover

A

Total asset turnover = net sales/average total assets

33
Q

Current ratio

A

Current ratio = current assets/current liabilities

34
Q

Quick ratio

A

Quick ratio = (cash + A/R + marketable securities)/current liabilities

35
Q

Debt to total assets

A

Debt to total assets = total liabilities/total assets

36
Q

Debt to equity ratio

A

Debt to equity ratio = total liabilities/total equity

37
Q

Times interest earned

A

Times interest earned = earnings before interest and taxes/interest exp.

38
Q

PE

A

PE = stock price/EPS

Yaegar BEC (30 decks)

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