Exam (elaborations)
HBX CORE FINAL EXAM
- Course
- Institution
Exam of 10 pages for the course HBX CORE at HBX CORE (HBX CORE FINAL EXAM)
[Show more]
Content preview
HBX COREFINAL EXAM
Return on Investment (ROI) - Answers -The return or profit received as a result of
investing funds.
Not measured by the DuPont Framework.
Cash Conversion Cycle (CCC) - Answers -The number of days between when a
company pays for inventory purchases and when a company collects from customers.
Not measured by the DuPont Framework.
Interest Coverage Ratio - Answers -The number of times a company can cover its
interest expense only using its earnings before interest and tax.
Not part of the DuPont Framework.
Deferred Tax Asset - Answers -Arises when taxable income exceeds Income Before
Taxes due to a temporary timing difference.
When a deferred Tax Asset arises it means a company is recognizing Tax Expense now
on an amount of income that will be reflected in the financial records later.
Income Before Taxes - Answers -The amount shown on the Income Statement after all
expenses have been taken away from the revenue for the period but before any tax
expense for the period. May also be referred to as Pretax Profit.
, Profit Margin - Answers -(Net Income/Sales ) measures the ability of a company to
make a profit relative to revenue generated during a period. A Profit Margin of 19% tells
us that for every $100 in sales, $19 ended up in Net Income.
Net Present Value - Answers -Is a calculation of the present values of all the cash
inflows and outflows of a project or investment.
Excel formula =NPV(E4,B3:B12)+B2
Remember,for NPV you have to manually add the negative outflow from time zero
related to the initial investment.
Asset/Expense Accounts - Answers -Asset and expense accounts increase with debit
and decrease with credit.
Income Statement - Answers -Shows a company's financial performance, because it
shows the accumulation of all nominal accounts over a period of time.
Gross Profit - Answers -Sales Revenue minus COGS.
Accounts Payable Turnover - Answers -Credit Purchases/Average Accounts Payable
Balance.
Internal Rate of Return (IRR) - Answers -The discount rate that sets the net present
value (NPV) of a project equal to zero. The IRR allows us to find the percentage rate
that would be earned for a given set of cash flows.
Gross Profit Margin Calculation - Answers -Gross Profit/Revenue =Gross Profit Margin
Leverage Ratio Calculation - Answers -Average Total Assets/Average Equity.
Suggested Formula =Average (B11,D5)/Average (Sum(B16:B18),D8).
Present Value Calculation - Answers -It is calculated by multiplying the annual payment
by the present value of an annuity factor.
$18,000*6.71008=$120,781
Return on Equity (ROE) - Answers -The return that a business generates during a
period on equity invested in the business by the owners of the business.
Measured in DuPont Framework.
Profit Margin - Answers -Profit Margin (Net Income/Sales) measures the ability of a
company to make a profit relative to revenue generated during a period.
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 Greaterheights. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76658 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now