Brainscape's Knowledge GenomeTM

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


See full index

Finance for Business > Week 3 > Flashcards

Week 3 Flashcards

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

Ratio analysis: market value ratios

A

Earnings per share
Price earnings ratio
Price earnings growth ratio

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

Market value measures…

A

Long term success of the company and shareholder value/returns

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

Earnings per share

A

Measures net income generated per share

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

Price earnings ratio

A

Measures how much investors are willing to pay per unit of current earnings

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

Price earnings growth ratio

A

Indicates whether shares are overvalued or undervalued against projected earnings growth rates

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

Market value per share =

A

Share price

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

Book value per share =

A

Total equity in accounts / number of shares

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

Market value of equity

A

Share price x number of shares

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

Market to book ratio

A

Indicates how successful a company has been overtime in creating value for its shareholders

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

Tobins Q

A

Compares market value of assets with cost of setting up similar company

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

Ratio analysis: The Du Pont Identity

A

Popular way of decomposing ROE into different parts

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

ROE is affected by

A

Operating efficiency, asset use efficiency and financial leverage

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

Operating efficiency

A

Net income / sales

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

Asset use efficiency

A

Sales / assets

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

Financial leverage

A

Assets / total equity

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

Time trend analysis

A

Looks at the same ratio over a number of years

17
Q

Peer group analysis

A

Compares ratio with similar firms

Companies in same industry

18
Q

Inappropriate peers

A

Some companies operate in several industries

19
Q

Aspirant analysis

A

Comparing your firm with the best in industry

20
Q

Sources of information

A

Financial websites and company accounts

Finance for Business (5 decks)

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