Exam (elaborations)
HBX CORe - Financial Ratios (FA-6) questions and answers graded A+ 2024/2025
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HBX CORe - Financial Ratios (FA-6) questions and answers graded A+ 2024/2025
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HBX CORe - Financial Ratios (FA-6)DuPont Framework - ANSROE = Profitability x Efficiency x Leverage
Return on Equity - ANSProfitability (profit margin) x Efficiency (asset turnover) x Leverage
Profit Margin - ANSNet Income / Sales
Asset Turnover - ANSSales / Avg. Assets
(*avg property over duration of income)
Leverage - ANSAssets / Equity
Gross Profit Margin - ANSGross Profit / Sales
(Gross Profit = Revenue - COGS, Net Income = Profit + COGS)
Inventory Turnover - ANSCOGS / Avg Inventory
(*avg inventory over the time of COGS)
*Higher = more green inventory mgmt
Days In Inventory - ANS365 / Inventory Turnover
Accounts Receivable Turnover - ANSCredit Sales / Avg. Accounts Receivable
Average Collection Period - ANS365 / Accounts Receivable Turnover
Accounts Payable Turnover - ANSCredit Purchases / Avg. Accounts Payable
(when you have credit score purchase information)
or
COGS / Avg. Accounts Payable
(used as assumption if you don't)
Days Purchases Outstanding - ANSAvg. Accounts Payable / (Avg. Credit Purchases / 365)
or
Avg. Accounts Payable / (COGS / 365)
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