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Exam (elaborations)

MSF Exit Exam (ANSWERED AND GRADED)
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  • Course
  • MSF
  • Institution
  • MSF

Operating Assets - Correct Answer Cash AR Inventory Prepaid Expenses Fixed Assets goodwill (representing operating synergies) intangibles Leases Operating Liabilities - Correct Answer total liabilities - total debt AP Accrued Liabilities Deferred Income Taxes What are financial ...

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Document information

  • October 13, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • operating assets cash ar inventory prepaid expense
  • operating liabilities total liabilities total de
  • what are financial assets assets that a company c
  • what are financial obligations short term borrow

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  • MSF
  • MSF

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MSF Exit Exam (ANSWERED AND GRADED)
Operating Assets - Correct Answer Cash

AR

Inventory

Prepaid Expenses

Fixed Assets

goodwill (representing operating synergies)

intangibles

Leases



Operating Liabilities - Correct Answer total liabilities - total debt

AP

Accrued Liabilities

Deferred Income Taxes



What are financial Assets? - Correct Answer assets that a company could liquidate and pay of its
shareholders without affecting its value proposition



What are financial obligations? - Correct Answer Short-term borrowings

long-term debt (in one year and longer)

leases (but remember that lease assets are operating)



Invested Capital - Correct Answer Net Working Capital + Net Fixed Assets + Intangible Assets

OR

Total Stockholders equity + financial obligations - financial assets



Net operating assets = Invested Capital

, Working Capital - Correct Answer Current Assets - current liabilites



ROIC - Correct Answer Return on Invested Capital

ROIC = Income on invested capital / Avg. Invested Capital



This is an accounting ratio. to compare income investors earned to what they have invested



NOPAT - Correct Answer Net Operating Profit After Taxes

- revenue less expenses (only operating) after tax because taxes are a cost that have to be covered



- To determine NOPAT we must adjust tax expense so that it only reflects taxes on operating activities



Operating income * (1- Tax rate)



Income on Invested Capital - Correct Answer -Income on Invested Captial = NOPAT



Net Financial Expense before tax - tax savings attributable to financing activites + consolidated net
income



Company XYZ invested $500,000 in a new project that generated a net income of $75,000 in the first
year. The average invested capital for the year was $450,000. Calculate the Return on Invested Capital
(ROIC) for the project. - Correct Answer 16.67%



Company ABC reported an operating profit of $200,000, and the tax rate is 30%. Calculate the Net
Operating Profit After Tax (NOPAT). - Correct Answer 200,000*(1-.3) = 140,000



RNOA - Correct Answer Return on Net Operating Assets

= NOPAT/Avg. Net Operating Assets



WACC - Correct Answer Weighted average cost of capital.

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