Smargintaxesrate coverageof all payments incomebefore

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smargintaxesrate Coverageof all ¿ payments = Incomebefore interest ,taxes lease payments Interest payments + Lease payments 4. Liquidity measures Current ratio = Current assets Current libilities Acid test ratio = Current assets Invetory Current Liablities Net liquid assets = Current assets Inventory Current liabilities Net working capital = Current assets Current liabilities 5. Profitability measures Before taxesnet income Total assets,net worth totalsales After tax net income Total assets After tax net income Net worth After tax net income Total sales profitmargin Leverage or capital structure measures Leverageratio = Totalliabilities Totalassets Capitalizationratio = Long termdebt Long termliabilities net worth Debt ¿ salesratio = Totalliabilites Net sales 6. Cash flow Net cash flow by origin = Net cash flow from Operations + Net cash flow from Investment + Net cash flow from Finance Operating cash flow = net cash flow from Operations + Noncash expense = Net Profits + Noncash expense (depreciation) = Sales – COGS – Selling, General and Administrative Expenses – Taxes paid in Cash + Noncash Expenses Indirect operating cash flows = Net income + Noncash expenses + Losses from the sale of assets – Gains from the sale of assets – Increases in assets associated with operations + Increases in current liabilities associated with operations – Decreases in current liabilities associated with operations + Decreases in current assets associated with operations 7. Pricing Loans Cost-plus loan pricing: Loan Interest Rate = Marginal Cost of Raising Loanable Funds to Lend to Borrower + Nonfund Bank Operating Costs + Estimated Margin to Compensate Bank for Default Risk + Bank's Desired Profit Margin Price leadership model: Loan Interest Rate = Base or Prime Rate + Default Risk Premium for Non- Prime Borrowers +
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  • Fall '19
  • Interest, Generally Accepted Accounting Principles

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