Quiz 2 Flashcards
Current Ratio
current assets/current liabilities
Debt Ratio
total Liabilities/Total Assets (how much of our assets are financed debt capital)
Income Statement Format
Revenues - COGS = Gross Profit
Gross Proft - Ops Exp = EBIT
EBIT - Int Exp = EBT
EBT - Tax = Net Income
Other terms for EBIT
Operating Profit / earnings before income tax
Other names for net income
gross income / revenue
Gross Margin
gross profit/net sales (% of each dollar left after cogs)
Net Profit Margin
net income/net sales (% of each dollar as profit)
Calculating return of a portfolio
Total Return in $ = amount recieved - amount invested
Calculating non annual return of a portfolio
return in % = retun in $ / amount invested
required rate of return
minimum acceptable return given the risks
Future value of lump sum
PV (1+i)^n
Present value of a lump sum
FV (1/(1+i)^n
To compound interest
divide the interest and multiply terms
Present value ordinary annuity
pmt (1-1/(1+i)^n) / i
Present value annuity due
PVA ordinary (1+i)
