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59 Cards in this Set
- Front
- Back
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fundamental accounting equation |
assets = liabilities + stockholders equity |
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financial statement analysis framework |
1- state the objective and context 2- gather data 3- process data 4- analyze and interpret data 5- report conclusions and recommendations 6- update the analysis |
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expanded accounting equation |
assets = liabilities + contributed capital + beginning retained earnings + revenue - expenses - dividends |
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income statement equation |
net income = revenues - expenses |
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percentage of completion method |
revenue, expense, and profit are recognized in proportion to the total cost incurred to date divided by the total expected cost |
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completed contract method |
revenue, expense, and profit are recognized when the contract is complete |
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installment method |
profit is recognized as the proportion of cash collected multiplied by the total expected profit |
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cost recovery method |
profit recognized when cash collections exceed estimated total costs |
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straight line depreciation |
(cost - salvage value) / useful life |
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double declining balance depreciation |
2/useful life * book value |
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basic EPS |
(net income - preferred dividend) / weighted avg common shares outstanding |
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diluted EPS |
adjusted income available for common shares / weighted average common and potential common shares outstanding |
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treasury stock method |
new shares = (avg market price - exercise price) / average market price * # shares covered by options and warrants |
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gross profit margin |
gross profit / revenu |
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net profit margin |
net income / revenue |
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current ratio |
current assets / current liabilities |
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quick ratio |
cash + marketable securities + receivables / current liabilities |
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cash ratio |
cash + marketable securities / current liabilities |
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long term debt to equity |
total long term debt / total equity |
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debt to equity |
total debt / total equity |
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total debt ratio |
total debt / total assets |
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financial leverage ratio |
total assets / total equity |
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interest and dividends received under IFRS vs GAAP |
IFRS- either CFO or CFI GAAP- CFO |
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dividends paid under IFRS vs GAAP |
IFRS- either CFO or CFF GAAP- CFF |
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net cash flows from creditors |
new borrowings - principal repaid |
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net cash flows from shareholders |
new equity issued - share repurchases - cash dividende |
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free cash flow to firm |
NI + non-cash charges + interest expense*(1-t) - net capital investment - working capital investment or CFO + interest expense*(1-t) + net capital expenditure |
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free cash flow to equity |
CFO - net capital expenditure + net borrowing |
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cash flow to revenue |
CFO / net revenue |
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csh return on assets |
CFO / average total assets |
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debt coverage ratio |
CFO / total debt |
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interest coverage ratio |
(CFO + interest paid + taxes paid) / interest paid |
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receivables turnover |
annual sales / average receivables
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inventory turnover |
cost of goods sold / average inventory |
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payables turnover ratio |
purchases / average trade payables |
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days of sales outstanding |
365 / receivables turnover |
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days of inventory on hand |
365 / inventory turnover |
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number of days payables |
365 / payables turnover ratio |
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cash conversion cycle |
days of sales outstanding + days inventory on hand - days payables |
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total asset turnover |
revenue / average total assets |
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fixed aset turnover |
revenue / average net fixed assets |
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working capital turnover |
revenue / average working capital |
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gross profit margin |
gross profit / revenue |
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operating profit margin |
EBIT / revenue |
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net profit margin |
net income / revenue |
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return on total capital |
EBIT / average total capital |
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return on equity |
net income / average total equity |
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return on common equity |
net income - preferred dividends / average |
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debt to equity |
total debt / total shareholders equity |
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debt to capital |
total debt / (total capital + total shareholders equity) |
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debt to assets |
total debt / total assets
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financial leverage |
average total assets / average total equity |
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interest coverage ratio |
EBIT / interest payments |
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fixed charge coverage ratio |
(EBIT + lease payments) / (interest payments + lease payments) |
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g |
retention rate * ROE |
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retention rate |
1 - dividends declared / net income available to common |
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return on equity (traditional dupont) |
(net income / equity) * (sales / assets) * (assets / equity) or net profit margin * asset turnover * leverage ratio |
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return on equity (extended dupont)
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(net income/EBIT) * (EBT/EBIT) * (EBIT/revenue) * (revenue/total assets) * (total assets/total equity) or tax burden * interest burden * EBIT margin * asset turnover * financial leverage |
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deferred tax assets |
difference between taxes payable to the tax authority and taxes payable on the income statement multiplied by the expected future tax rate |
