EXAM#1 Study Guide

EXAM#1 Study Guide - C. Debt management 1. Debt ratio = D/A...

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BMGT 340 EXAM #1 Study Guide I. Financial Report 1. EBIT = REV. – Operating costs 2. EVA = EBIT (1 – T %) – (Investor supplied Capital x Capital T %) 3. Investor supplied Capital = NOWC + Net fixed assets 5. NOPAT = EBIT. 1 – T %. 6. NOWC = Current capital – Non-interest bearing CL = (Cash + A/R + Inventories) – (A/P + Accruals) 8. Total operating capital = NOWC + Net fixed assets II. RATIO A. Liquidity 1. Current ratio = Current asset / Current liability 2. Quick ratio = (Current asset – Inventories) / Current liability B. Asset management 1. Inventory turnover = Sales/Inventories 2. DSO = Receivables / (Annual sales/365) 3. Fixed asset turnover = Sales/Net fixed assets 4. Total asset turnover = Sales / Total assets
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Unformatted text preview: C. Debt management 1. Debt ratio = D/A = (D/E) / (1 + D/E) = 1 1/Equity multiplier D/E = (D/A) / (1-D/A) 2. Times-interest-earned (TIE) = EBIT/Interest expense D. Profitability 1. Operating margin = EBIT/Sales 2. Profit margin = Net income/Sales 3. Basic earning power = EBIT/Total asset 4. ROA = Profit margin x Total assets turnover = (Net income/Sales) x (Sales/TA) = Net income/Total assets 5. ROE = ROA x Equity multiplier = Profit margin x Total assets turnover x Equity multiplier = (Net income/Sales) x (Sales/TA) X (TA/Equity) = Net income/Total common equity E. Market value 1. P/E = Price/Earnings per share 2. M/B = Market price/Book value per share III. Money Value 1. FV = PV (1 + I) N = PV (1 + I NOR /M) M 2. PV = FV / (1 + I) N 3. EFF% = (1 + I/M) M-1...
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