CFA Level 1 FRA Exam Questions and Answers
Fixed charge coverage ratio - Answer-EBIT plus lease payments divided by interest payments plus lease payments
Gross profit - Answer-Sales minus cost of goods sold
Gross profit margin - Answer-gross profit divided by revenue
operating profit m...
CFA Level 1 FRA Exam Questions and
Answers
Current Ratio - Answer-Current Assets divided by current liabilities
Quick Ratio - Answer-Cash plus marketable securities plus receivables divided by
current liabilities
Cash Ratio - Answer-Cash plus marketable securities divided by current liabilities
Defensive Interval Ratio - Answer-Cash plus marketable securities plus receivables
divided by average daily expenditures
Cash Conversion cycle - Answer-days in inventory plus days in accounts receivables
minus days in accounts payable
Accounts receivable turnover - Answer-revenue divided by average accounts receivable
inventory turnover - Answer-cost of goods sold divided by average inventory
Accounts payable turnover - Answer-purchases divided by average accounts payable
Cost of Goods Sold - Answer-Beginning inventory plus purchases minus ending
inventory
Operating cycle - Answer-days in inventory plus days in accounts receivable
Fixed asset turnover - Answer-revenue divided by average net fixed assets
working capital turnover - Answer-revenue divided by average working capital
equity turnover - Answer-revenue divided by average equity
debt to equity ratio - Answer-total debt divided by total equity
debt ratio - Answer-total debt divided by total assets
debt to total capital ratio - Answer-total debt divided by total debt plus total equity
Financial leverage ratio - Answer-average total assets divided by average total equity
interest coverage ratio - Answer-EBIT divided by interest payments
, Fixed charge coverage ratio - Answer-EBIT plus lease payments divided by interest
payments plus lease payments
Gross profit - Answer-Sales minus cost of goods sold
Gross profit margin - Answer-gross profit divided by revenue
operating profit margin - Answer-operating profit divided by revenue
pretax margin - Answer-earnings before tax divided by revenue
Net profit margin - Answer-net income divided by revenue
Return on assets - Answer-net income divided by average total assets
Return on Assets - Answer-EBIT divided by average total assets
operating return on assets - Answer-operating profit divided by average total assets
return on total capital - Answer-EBIT divided by average total capital
Return on Equity - Answer-net income divided by average total equity
Return on Equity - Answer-Return on Assets times financial leverage
Return on Equity - Answer-Net profit margin times asset turnover times leverage ratio
Return on common equity - Answer-net income minus preferred dividends divided by
average common equity
DuPont Formula - Answer-Net profit margin times total asset turnover times leverage
Net Profit margin - Answer-net income divided by revenue
Total asset turnover - Answer-Revenue divided by average assets
Leverage - Answer-Average assets divided by average equity
Extended DuPont Formula - Answer-Tax burden times interest burden times operating
profit margin times asset turnover times leverage
Tax burden - Answer-Earnings after tax divided by earnings before tax
Interest burden - Answer-Earnings before tax divided by EBIT
Operating profit margin - Answer-EBIT divided by revenue
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