Chapter 07: Current Asset Management
Current Asset Management
In the management of cash and marketable securities, why should the primary
concern be for safety and liquidity rather than maximization of profit?
Chapter 09: Time Value of Money
Time Value of Money
How is the future value (Appendix A) related to the present value of a single
sum (Appendix B)?
The future value represents the expected worth of a single amount, wher
Chapter 11: Cost of Capital
Cost of Capital
Why do we use the overall cost of capital for investment decisions even when
only one source of capital will be used (e.g., debt)?
Though an investment financed by low-cost
Chapter 04: Financial Forecasting
What are the basic benefits and purposes of developing pro forma statements and
a cash budget?
The pro-forma financial statements and cash budget enable the firm t
Chapter 18: Dividend Policy and Retained Earnings
Dividend Policy and Retained Earnings
How does the marginal principle of retained earnings relate to the returns that a
stockholder may make in other investments?
Chapter 02: Review of Accounting
Review of Accounting
Discuss some financial variables that affect the price-earnings ratio.
The price-earnings ratio will be influenced by the earnings and sales growth of
the firm, the
Chapter 14: Capital Markets
In addition to U.S. corporations, what government groups compete for funds in
the U.S. capital markets?
The federal government, government agencies, and state and local gove
F301 (Block, Hirt and Danielsen)
The following normal notations are used for few Ratios in Chapter 3
E =Stockholders equity
A= Total assets
ROE= Return on Equity
S = Total Sales
S/A =Total Asset Turnover Ratio (#8)
D =Total debt or total liabilit
Profit Margin Net Income
ROA net income
ROE net income
Avg Collection Period
Avg Daily Credit Sales
Inventory Turnover Inventory
Fixed asset Tu
Jross P rofits
- Depreciation Expense
Operating p rofit (EBIT)
- Interest Expense
Earnings Before Taxes (EBT)
Earnings a fter Taxes (EAT)
- Preferred s tock dividends
Earnings available c ommon s tock