HBX CORE FINAL EXAM 2024 | ACTUAL QUESTIONS & ANSWERS
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Course
HBX Core.
Institution
HBX Core.
HBX CORE FINAL EXAM 2024 | ACTUAL QUESTIONS
& ANSWERS
Net Present Value - 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
rela...
Internal Rate of Return (IRR) - 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.
Leverage Ratio Calculation - Average Total Assets/Average Equity.
Suggested Formula =Average (B11,D5)/Average (Sum(B16:B18),D8).
Present Value Calculation - 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) - 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.
Return on Investment (ROI) - The return or profit received as a result of investing
funds.
Not measured by the DuPont Framework.
Cash Conversion Cycle (CCC) - 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 - 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 - 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 - 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 - (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.
Profit Margin - Profit Margin (Net Income/Sales) measures the ability of a company to
make a profit relative to revenue generated during a period.
In Excel Net Income/Revenue.
Average Collection Period - 365/AR Turnover =365/(Credit Sales/ Average AR
Balance)
Current Ratio - The current ratio is a measure of a business' ability to pay its short term
obligations.
Quick Ratio - measures the ability of a company to use its quick assets to pay off its
short-term debts.
Debt to Equity Ratio - measures a company's leverage, not ability to pay off its debts.
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