Exam (elaborations)
FNCE 3050 CH3b FINANCIAL EQUATIONS
- Course
- Institution
FNCE 3050 CH3b FINANCIAL EQUATIONS ...
[Show more]
Content preview
FNCE 3050 CH3b FINANCIAL EQUATIONSTotal Assets are given ROA, Sales, and Profit Margin - ANSWER Total Assets =
(Sales * Profit margin) / ROA
Sustainable Growth Rate Given Dividend Payout Ratio and ROE - ANSWER 1.
Find Retention Rate (RR) = 1 - Dividend Payout Ratio
2. Sustainable Growth Rate = (ROE * RR)/( 1- (ROE * RR))
Internal Growth Rate = - ANSWER (ROE * RR) / (1 - (ROE * RR))
which is also the Sustainable Growth Rate
Retention Ratio = - ANSWER (1 - dividend payout ratio) or
Addition to Retained Earnings / Net income Available to Stock Holders
DuPont System of Analysis - ANSWER An analytical method that uses the balance
sheet and income statement to break the ROA and ROE ratios into component
pieces.
Current Ratio - ANSWER Current Assets / Current Liabilities
Quick Ratio - ANSWER (Current Assets - inventory) / Current Liabilities
Cash Ratio - ANSWER (cash + marketable securities) / current liabilities
Liquidity Ratios - ANSWER Measure the short-term ability of the company to pay
its maturing obligations and to meet unexpected cash needs.
Current Ratio, Quick Ratio, Cash Ratio
Asset Management Ratios - ANSWER financial ratios that measure how
effectively a firm is using its assets to generate revenues or cash
Inventory Turnover, Days' Sales in inventory, Accounts Receivable Turnover,
Average Collection Period, Accounts Payable Turnover, Fixed Asset Turnover,
Sales to Working Capital, Total Assets Turnover, Capital Density.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Mirror. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78140 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now