Exam (elaborations)
CPA Exam - BEC Lecture 3 Ratios (2)
- Course
- CISA - Chapter 1
- Institution
- CISA - Chapter 1
CPA Exam - BEC Lecture 3 Ratios (2)
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CPA Exam - BEC Lecture 3 RatiosAccounts Payable Deferral Period - ANS-365 /
Accounts Payable Turnover
Accounts Payable Turnover - ANS-Cost of Sales /
Average Accounts Payable
Accounts Receivable Collection Period (*Same as days sales outstanding) - ANS-365 /
Accounts Receivable Turnover
Accounts Receivable Turnover - ANS-Net Credit Sales /
Average Net Receivables
After - tax cash flows - ANS-Pretax cash flow X (1-Tax Rate)
After - tax cost of debt - ANS-Pretax cost of debt X (1-Tax Rate)
Annual Percentage Rate (APR) of quick payment discount - ANS-[360 / (Pay Period - Disc.
Period)] X [Discount/ (100-Discount %)]
Cash Conversion Cycle - ANS-Inventory Conversion Period + Receivables Collection Period -
Payables Deferral Period
Cost of Preferred Stock - ANS-Preferred Stock Dividends /
Net Proceeds of Preferred Stock
Cost of Retained Earnings ( CAPM) - ANS-=Risk Free Rate + Risk Premium
=Risk Free Rate + (Beta X Market Premium)
=Risk Free Rate + (Beta X (Market Return - Risk Free Rate))
Cost of Retained Earnings (Bond Yield Plus Risk Premium) - ANS-Pretax cost of long-term debt
+ Market Risk Premium
Cost of Retained Earnings (Disc. Cash Flow) - ANS-(D1/P0) + g
and D1=D0(1+g)
Current Ratio - ANS-Current Assets /
Current Liabilities
Days Cost of Sales in Inventory (*Same as Inventory Conversion Period) - ANS-Average
Inventory /
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