Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Corp Finance > Ratios > Flashcards

Ratios Flashcards

To understand and memorize ratios

You may prefer our related Brainscape-certified flashcards:
Series 66 flashcards SIE Exam flashcards Series 63 flashcards Series 79 Top-Off Exam flashcards Series 7 Top-off Exam flashcards CFA flashcards Series 65 flashcards
1
Q

Return on Assets

A

EBIT/Total Assets

For every dollar you have in assets they are making a return of __%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Return on Equity

A

Net Income/Equity (This is what will change with interest rates)

For every dollar you have in equity you are making __% return on it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Financial Leverage

A

If ROA is the same as ROE is means either two things.

1) The Company has no debt
2) The interest rate is the same as the ROA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Positive financial leverage

A

The ability to be able to borrow greater amount of money because you are, as of now, borrowing money at a lower interest rate than what you are earning back on the money you borrowed (your liabilities are working for you)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Negative Financial Leverage

A

When the interest rate at which you are currently borrowing is lower than what you are making back on the money you borrow (your liabilities are working against you and not pulling their weight)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Dividend payout ratio

A

Dividends/Net Income

For every dollar you have in net income you are paying out $XXX in dividends (This is 100%-retention ratio)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Retention Ratio

A

Addition to Retained Earnings/Net Income

For every dollar you earn in net income you are adding $XXX to RE (This is 100%-dividend payout ratio)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

AVG Tax Rate

A

Amount taxed/Taxable Income

This shows avg tax rate over different tiered tax rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Marginal tax rate

A

The tax rate of one additional dollar, also states what is your highest tax bracket

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Net Working Capital

A

Current Assets - Current Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Earnings per share

A

Net Income/Avg shares outstanding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Dividends per share

A

Dividends/Avg shares outstanding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Statement of cash flows

A

1) Operating Activity (inflow/outflow from operations)
2) Investing Activity (Long-term assets PPE etc)
3) Financing Activity (Long-term liabilities N/P etc, long term financing dividends etc)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Current Ratio

A

Current Assets/Current Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Quick Ratio

A

Current Assets - inventory - prepaid exp etc/Current Liabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Cash Ratio

A

Cash/Current Liabilities

17
Q

Inventory Turnover

A

COGS/Avg inventory

18
Q

Days sales in inventory

A

365/inventory turnover

19
Q

receivable turnover

A

sales/A/R

20
Q

Days sales in receivable (avg collections period)

A

365/receivable turnover

21
Q

Fixed Asset Turnover

A

Sales/net fixed assets

22
Q

Total asset Turnover

A

sales/total assets

23
Q

Interval Measure

A

Current Assets/Avg daily operating costs

Says how long you can survive without operating/selling

24
Q

1) Debt Assets Ratio

A

Total Debt/total assets

For every dollar I have in assets, I borrowed $xx

25
Q

2) Debt to equity Ratio

A

total debt/total equity

For every dollar the owners put up, they borrowed $xx

26
Q

3) equity Multiplier

A

Total Assets/total equity

For every dollar the owners put up the have $xx in assets

27
Q

4) Times interest Earned

A

EBIT/interest

For every dollar I owe in interest I am earning $xx

28
Q

5) Cash Coverage Ratio

A

EBIT + Depreciation exp/interest

For every dollar I owe in Interest I am generating $xx in CASH

29
Q

Dupont Anylisis

A 
Profit Margin (net Income/Net Sales)
x
Total Asset Turnover (sales/total assets)
=
ROA (Net Income/Total assets)
x
Equity Multiplier (Total Assets/Total Equity)
=
ROE (Net Income/Total Equity)
30
Q

Price-earnings ratio

A

price per share/earnings per share

People are willing to pay XX times earnings per share to buy 1 share, usually between 12-18

31
Q

Earnings per share

A

Net Income/Shares outstanding

32
Q

PEG Ratio

A

Price-earnings ratio/anticipated growth rate

PEG should be between 1-2

33
Q

Capital Intensity ratio

A

total assets/total sales

For every dollar you increase in sales you need $XX to support that increase

34
Q

External Funds Needed (EFN)

A

How much you need to borrow in order to increase you business and support projected sales

35
Q

Internal Growth Rate

A

ROA x Retention ratio/1-(ROA x retention Ratio)

How much you can grow without external financing

36
Q

Sustainable Growth Rate

A

ROE x retention Ratio/1-(ROE x Retention Ratio)

How much you can grow just by borrowing money and not financing more through equity

Corp Finance (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions