SU8: Activity Measures Flashcards
Accounts Receivable Turnover
Net Credit Sales / Average AR
Days Sales Outstanding
Days in Year / AR Turnover
Inventory Turnover
Cogs / Average Inventory
Days Sales in Inventory
Days In Year / Inventory Turn
Accounts Payable Turnover
Purchases / Average Accounts Payable
Days Purchases in Accounts Payable
Days in Year / Accounts Payable Turnover
Operating Cycle
Days Sales Outstanding in Receivables + Days Sales In Inventory
Cash Cycle
Operating Cycle - Days Purchases in Accounts Payable
Working Capital Turnover
Sales / Working Capital
Fixed Assets Turnover
Net Sales / Average PPE
Total Asset Turnover Ratio
Net Sales / Average Total Assets
Usable Funds Calculation
Invoice Amount x (1 - Discount Percent)
Annualized Cost of Not Taking a Discount
[Discount / (1 - Discount Percent)] x [Days in Year / (Total Payment Period - Discount Period)]
Effective interest Rate
Net Interest Expense / Usable Funds
Effective rate on a discounted loan
Stated Rate / (1 - Stated Rate)
Discounted Loan - total amount available
Loan Amount = Usable Funds / (1 - Stated Rate)
Loan amount with compensating balance
Usable Funds / (1 - Compensating balance Percent)
Rate of Loan Amount with Compensating Balance
Stated Rate / (1 - Compensating Balance Percent)
Annualized Rate of Commercial Paper
[(Face Value - Net Proceeds) / Net Proceeds] x Number of terms per year
What is a bankers acceptance?
A source of short term financing. sort of like a very short term bond.
What is a trust receipt
an instrument issued by a borrower that proviced inventory as collateral.
chattel mortgage
a loan secured by personal property (movable property such as equipment or livestock)
floating lien
a loan secured by property, such as inventory, the composition of which may be constantly changing
lease
a long-term, contractual agreement in which the owner of property (the lessor) allows another party (the lessee) the right to use the property for a stated period in exchange for a stated payment
