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CH. 3: WORKING WITH FINANCIAL STATEMENTS:-ROA = Profit Margin x Total Asset Turnover-ROE = ROA x Equity Multiplier-DuPont Identity: ROE = (Net Income / Sales)(Sales / Assets)(Assets / Equity) -DuPont Identity: ROE = Profit Margin x Total Asset Turnover x Equity Multiplier)-Sustainable growth rate vs internal growth rate. Know how to connect the with Dupont Identity-Internal Growth Rate = the maximum rate at which the firm can grow without any debt or equity financing= growth % when EFN is 0= (ROA x R) / (1 - ROA x R) (R = Retention Ratio)-Sustainable Growth Rate = the maximum rate at which the company can grow without any additional equity financing.= (ROE x R) / (1 – ROE x R)-Capital intensity ratio = 1/total asset turnover= assets / sales-Equity Multiplier = 1+debt to equity ratio= 1+(total debt / total equity)-Retention Ratio = 1 – Dividend Payout RatioCH. 4: LONG TERM FINANCIAL PLANNING AND CORPORATE GROWTH:-Pro Forma = next period-Capacity = capacity of fixed assets (only assets change)-Current Sales = Capacity Rate x Full capacity level of sales-Pro Forma Net Fixed Assets = (net fixed assets / full capacity) x projected sales growthCH.6: DISCOUNTED CASH FLOW VALUATION:-