FIN 430 Notes Final Exam PDF

Preview

Summary

LIQUIDITY RATIO Current RatioCurrent Asset Current Liabilities  Quick RatioCurrent Asset – Inventory Current liabilities  Net Working Capital Current Asset- Current Liabilities Company has (lower/higher) liquidity position compared to industry average, this means that the company has less abilit...

Description

FORMULA & SHORT NOTES LIQUIDITY RATIO  Current Ratio

company time interest earned (higher/lesser) than industry average.

 Inventory Turnover

Current Asset

COGS @ Annual Sales

PROFITABILITY RATIO

Current Liabilities

Inventory

 Net Profit Margin Net Profit after tax

 Total Asset Turnover

 Quick Ratio

Total Revenue

Annual Sales Current Asset – Inventory Current liabilities

 Company has (lower/higher) liquidity position compared to industry average, this means that the company has less ability to pay short term obligations compared to industry average. After deducting inentories, the company is still (able/unable) to meet short term obligation hower (lower/higher) than industry average.

 Return on Asset

Total Asset 

 Net Working Capital Current Asset- Current Liabilities

Net Profit After Tax

There is (less/more) effiecient compared to industry average in managing its assets to generate sales. The company takes (longer/short) duration to collect a receivable compared to industry average and turns it investors (slower/faster) than industry average

Total Asset  Return On Equity Net Profit After Tax Shareholder Equity  Operating Profit Margin EBIT

LEVERAGE RATIO

Sales  Gross Profit Margin

 Debt Ratio

Gross Profit

Total Debt ACTIVITY RATIO

Account Receivable

X360

Daily Credit Sales  Account Receivable Turnover Credit Sales Account Receivable

Sales

Total Asset

 Average Collection Period

is

 Debt Equity Ratio



Long term debt Shareholder equity  Time Interest Earned EBIT Interest Expenses  The company uses more borrowed fund to finance its assets. So it is risky. The



The company is generating (more/less) compared to industry average. The company ROE is higher, so for every RM 1, the company invested in its shareholder wealth, the company can generate RM 0.22 compared to industry average RM 0.19 ROA: invested in asset

Future Value: Single Sums Eg: If you deposit $100 in an account earning 6%, how much would you have in the account after 1 year?

2nd +/- enter 1000 PMT 8 i/y 3N CPT PV= -2577.10

FV= PV(FVIFi,n) 2nd +/- enter 100 +/- PV 6 I/y 1N CPT FV= 106

Reitrement Eg: If you invest $400 at the end of each month for the next 30 years at 12%, how much would you have at the end of year 30?

Present value: Single Sums Eg: If you receive $100 one year from now, what is the PV of that $100 if your opportunity cost is 6% PV=FV(PVIFi,n) 2nd +/- enter 100 FV 6 i/y 1N CPT PV= 94.34

FV=PMT(FVIFAi,n) 2nd +/- enter 400 +/- PMT 1 i/y 360 N CPT FV=1397985.65 *Singkatan ringkas FV ada +/PV tak payah

Future Value- Annuity Eg: If you invest $1000 each year at 8%, how much would you have after 3 years? FV= PMT(FVIFAi,n) 2nd +/- enter 1000 +/- PMT 8 i/y 3N CPT FV= 3246.40 Present Value-Annuity Eg: What is the PV of $1000 at the end of each of the next 3 years, if the opportunity cost is 8%? PV=PMT(PVIFAi,n)

Cost of trade credit Discount rates X

360

100%-discount rate credit period-discount period

Simple Interest Loan EIR= I P-I

X 360 t

Discount Loan

WACC

Net Present Value (NPV)

EIR = I

( E X Re) + (D X Rd)(1- tax)

Even/Uneven

X 360

P-I

V

t

CF 110 000 +/- enter

Compensating Balance

WAFC

EIR= I

(E X Fe) + ( D X fd)

X

20 000 enter

360

P-CB

2nd +/- enter

V

t

V

20 000 enter

V

40 000 enter

Revolving Credit Line

V=D+E

EIR = I+CF

True Cost = Project Cost

X 360

P

t

40 000 enter

(1 – WAFC)

Revolving (Combination)

NPV (without FC)

EIR = I+ CF X 360

Cash Flow - Project Cost

P- CB

t

CPT RM 27 710.76

Payback Period

I

Equal amount

Commercial Paper

NPV (with FC)

EIR = I + FEE X 360

Cash Flow – True Cost

P-I-FEE

Re – g

Initial Outlay Cash Flows

t

I

Dividend Growth Po = Do (1+g)

40 000 enter NPV 4.6 enter

Unequal amount/Discounted Payback Period

Floation Cost = TC – PC

@ Re = D1

+g

Po-Fc

Cash flow in last year

2nd +/- enter

Preferred Stock

CF 2nd CE/C (TC) +/- enter

Rp =

(cash flow) enter

D Po-Fc

Bond 2nd +/- enter (tahun) N (coupon) PMT (par value) FV (selling) +/- PV CPT i/y

Years full recovery + uncovered cost beginning year

NPV (WACC) enter

(N) enter CPT

Average Accounting Return(AAR) Average net income Average Book Value Net income = OCF – Depreciation Depreciation = Intial Outlay – SV No of years ARR = ∑Net Income / No of years

(Intitial Outlays + Salvage Value) / 2 Internal Rate of Return (IRR) 2nd +/- enter CF 110 000 +/- enter 20 000 enter 20 000 enter 40 000 enter 40 000 enter 40 000 enter IRR CPT 12.13%

Crossover Rate 2nd +/- enter CF 1 000 +/- enter 100 enter +/2000 enter 2 000 enter 500 enter IRR CPT 76.54% *+/- digunakan kalau no tuh negatif

Profitability Index (PI) Uneven / Even PI = NPV + Intial Outlay Intial Outlay...