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Boston University
School of Management
SM 299
Spring 2007
Examination 1
Before beginning the examination please provide the information requested by the
Student Enrollment Sheet:
1.
In the section for I.D. Number please make the first
two numbers correspond to the number for your
section:
B1
01
B2
02
B3
03
B4
04
B5
05
B6
06
Follow your section number with the eight digits of
your BU ID number.
For example, a student in
section B3 would make the first two numbers 03.
If
her ID number was 82829595, she would fill in the
ten spaces for ID Number with 0382829595.
2.
A phone number where you can be reached today in
the event that there is some problem with your
exam’s score sheet.
3.
Your name.
4.
The version of the exam you are taking (A, B, C, or
D), found in the upper left corner of all exam pages.
Place this information in Test Form section.
I confirm that my work on this examination is consistent with the Boston University
School of Management Academic Conduct Code.
I have neither given nor received
assistance on this examination.
_______________________________________
Signature
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Ratios and Other Formulas
DuPont Identity –
ROE = ROS x Asset Turnover x Equity Multiplier = ROA x Equity Multiplier
Current Ratio = Current Assets / Current Liabilities
Quick Ratio = (Current Assets  Inventory) / Current Liabilities
Working Capital = Current Assets  Current Liabilities
Equity Multiplier = Leverage = Total Assets / Total Equity
Degree of Operating Leverage = % Change in EBIT / % Change in Revenues
Degree of Financial Leverage = % Change in Net Income / % Change in EBIT
Degree of Total Leverage = % Change in Net Income / % Change in Revenues = DOL x DFL
Days Receivable = (Year end Accounts Receivable / Year’s Sales) x 365
Days Inventory = (Year end Inventory / Year’s Cost of Goods Sold) x 365
Days Accounts Payable = (Year end Accounts Payable / Year’s Cost of Goods Sold) x 365
Asset Turnover = Yearly Sales / Year end Total Assets
Return on Assets
(ROA) = Net Income (for one period) /
Average Assets
Return on Sales
(ROS) = Net Income (for one period) / Total Revenue
Return on Equity
(ROE) = Net Income (for one period) / Average Equity
Operating Margin = EBIT (for one year) / Total Revenue
(EBIT = Earnings Before Interest and Taxes)
Asset Turnover = Total Sales / Total Assets
Present Value = Future Value
N
/ (1+
d
)
N
Where:
N = Number of years
d
= (discount rate expressed in % / year)/ 100
(Example: if the discount rate is 10%,
d
=
0.10)
Future Value
N
= Future Value for year N
Breakeven
at the "aggregate" level
= Fixed Costs / % Gross Margin
Breakeven
at the detailed level
= Fixed Costs / (Unit Price  Unit Cost)
= Fixed Costs / Unit Contribution
PE = Price to earnings ratio = Share price / Earnings per share
Operations Management Processing time = run time + setup time
1)
Cycle time = processing time / workers:
Note – the number of workers applies when the
process is manual or else it could be the number of machines.
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 Spring '08
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 Balance Sheet, Income Statement, Revenue, Generally Accepted Accounting Principles, Version A page

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