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Financial Statement Analysis

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Debt to equity

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2. Payable Turnover
NI/average total equity
(days sales outstanding)+(Days of Inventory on hand)-(Number of days payable)
Cash+Marketable Securities+ Receivables)/Current Liabilities
Purchases/Average trade payable

3. Interest coverage
(CFO+interest paid+taxes paid )/interest paid
COGS/Average Inventory
CFO/cash paid for long term asset
NI+ non-cash charges+[Interest expense*(1-T)]-fixed capital investment-working capital investments OR CFO+[Interest expense*(1-T)]-fixed capital investment

4. Dividend payment
EBIT/Revenue
CFO/dividends paid
CFO-fixed capital investment+net borrowing
(2/useful life)*(Cost-Depreciation)

5. Interest expense
Annual Sales/Average receivables
Cash+Marketable Securities+ Receivables)/Current Liabilities
(NI-preferred dividends)/weighted average of common shares
(market rate at issue)*(balance sheet value of the liability at beg period)

6. Return on equity
Begininng inventories+purchases-COGS
NI/average total equity
Purchases/Average trade payable
(CFO-preferred dividends)/weighted average number of common shares

7. Day of inventory on hand
EBIT/Revenue
NI available to common/average common equity
365/Inventory turnover
Average Total Asset/Average total equity

8. Gross Profit Margin
Taxes payable+Change in DTL - Change in DTA
Gross Profit/Revenue
365/receivables turnover
NI available to common/average common equity

9. Straight Line depreciation
CA/CL
NI/Average Total assets or [NI+interest expense(1-T)]/average total assets
(CFO+interest paid+taxes paid )/interest paid
Cost-Salvage/useful Life

10. Cash to income
[NI/sales][Sales/Assets][Assets/Equity]
(market rate at issue)*(balance sheet value of the liability at beg period)
CFO/operating income
Gross Profit/Revenue

11. FCFE
Total debt/(Total debt+Total shareholders equity)
CFO/Total debt
CFO-fixed capital investment+net borrowing
(EBIT+lease payments)/(interest payments+lease payments)

12. DDB
(2/useful life)*(Cost-Depreciation)
CFO/cash outflows from investing and financing
(Cash+Marketable Securities)/Current Liabilities
CA/CL

13. Cash to ROE
365/payable turnover ratio
Purchases/Average trade payable
CFO/average total equity
CFO/dividends paid

14. Debt to capital
CFO/operating income
NI/total capital
(CFO+interest paid+taxes paid )/interest paid
Total debt/(Total debt+Total shareholders equity)

15. CF per share
STD OI/mean OI
Annual Sales/Average receivables
(CFO-preferred dividends)/weighted average number of common shares
(market rate at issue)*(balance sheet value of the liability at beg period)

16. Debt to Asset
Total Debt/Total Asset
Cost-Salvage/useful Life
CFO/cash paid for long term asset
NI/average total equity

17. Income tax expense
Taxes payable+Change in DTL - Change in DTA
CFO-fixed capital investment+net borrowing
CFO/cash paid for long term asset
CFO/average total equity

18. Net Profit Margin
(NI-preferred dividends)+(convertible preferred dividends)+(convertible debt interest)*(1-T)/(weighted average of common shares+conv. preferred shares+conv.of debt+issuable from stock option)
Total Debt/Total Asset
EBIT/Revenue
NI/Revenue

19. Original DuPont:ROE
[NI/sales][Sales/Assets][Assets/Equity]
EBIT/total asset
(CFO+interest paid+taxes paid )/interest paid
Revenue/Average Working Capital

20. Total asset turnover
NI/Revenue
[(Orginal Cost-Salvage)/Life in output units] * output units in production
Revenue/Average Total Assets
365/payable turnover ratio

21. Cash to ROA
365/receivables turnover
[(Orginal Cost-Salvage)/Life in output units] * output units in production
CFO/average total assets
NI+ non-cash charges+[Interest expense*(1-T)]-fixed capital investment-working capital investments OR CFO+[Interest expense*(1-T)]-fixed capital investment

22. CV Operating Income
(CFO-preferred dividends)/weighted average number of common shares
365/receivables turnover
STD OI/mean OI
Revenue/Average Total Assets

23. Fixed charged coverage
(NI-preferred dividends)+(convertible preferred dividends)+(convertible debt interest)*(1-T)/(weighted average of common shares+conv. preferred shares+conv.of debt+issuable from stock option)
(EBIT+lease payments)/(interest payments+lease payments)
Revenue/Average Total Assets
(CFO-preferred dividends)/weighted average number of common shares

24. Receivables Turnover
Purchases/Average trade payable
NI+ non-cash charges+[Interest expense*(1-T)]-fixed capital investment-working capital investments OR CFO+[Interest expense*(1-T)]-fixed capital investment
Annual Sales/Average receivables
NI/Revenue

25. Inventory turnover
COGS/Average Inventory
(Cash+Marketable Securities)/Current Liabilities
365/Inventory turnover
(market rate at issue)*(balance sheet value of the liability at beg period)

26. Cash Ratio
CFO/operating income
CFO-fixed capital investment+net borrowing
(Cash+Marketable Securities)/Current Liabilities
Begininng inventories+purchases-COGS

27. CF to Revenue
CFO/Net Revenue
CFO/cash long-term debt repayment
[NI/sales][Sales/Assets][Assets/Equity]
CFO/dividends paid

28. Return on common equity
STD OI/mean OI
NI available to common/average common equity
ROCE - ROA
STD NI/Mean NI

29. Debt payment
NI/average total equity
(NI-preferred dividends)/weighted average of common shares
CFO/cash long-term debt repayment
(EBIT+lease payments)/(interest payments+lease payments)

30. FCFF
Average Total Asset/Average total equity
NI+ non-cash charges+[Interest expense*(1-T)]-fixed capital investment-working capital investments OR CFO+[Interest expense*(1-T)]-fixed capital investment
CFO-fixed capital investment+net borrowing
(CFO+interest paid+taxes paid )/interest paid

31. Investing and financing
Begininng inventories+purchases-COGS
CFO/cash outflows from investing and financing
EBIT/Revenue
CA/CL

32. Return on total capital
EBIT/Revenue
NI/total capital
STD of Sales/Mean Sales
CFO-fixed capital investment+net borrowing

33. CV NI
STD NI/Mean NI
(Cash+Marketable securities+Receivables)/Average Daily Expenditures
COGS/Average Inventory
Taxes payable+Change in DTL - Change in DTA

34. Operating Profit Margin
EBIT/Revenue
(NI-preferred dividends)/weighted average of common shares
STD NI/Mean NI
Revenue/Average Working Capital

35. Financial Leverage
(NI-preferred dividends)+(convertible preferred dividends)+(convertible debt interest)*(1-T)/(weighted average of common shares+conv. preferred shares+conv.of debt+issuable from stock option)
Average Total Asset/Average total equity
Revenue/Average Fixed Assets
EBIT/total asset

36. Operating return on assets
CFO/Net Revenue
(days sales outstanding)+(Days of Inventory on hand)-(Number of days payable)
Revenue/Average Fixed Assets
EBIT/total asset

37. Leverage
NI available to common/average common equity
ROCE - ROA
(days sales outstanding)+(Days of Inventory on hand)-(Number of days payable)
CFO/cash outflows from investing and financing

38. Days of sales outstanding
[NI/sales][Sales/Assets][Assets/Equity]
Annual Sales/Average receivables
CFO/operating income
365/receivables turnover

39. Debt coverage
CFO/Net Revenue
EBIT/Revenue
EBT/Revenue
CFO/Total debt

40. Units in production
365/Inventory turnover
NI/total capital
(Cash+Marketable Securities)/Current Liabilities
[(Orginal Cost-Salvage)/Life in output units] * output units in production

41. Ending inventories
Revenue/Average Fixed Assets
STD of Sales/Mean Sales
Begininng inventories+purchases-COGS
CFO/operating income

42. CV sales
Taxes payable+Change in DTL - Change in DTA
STD of Sales/Mean Sales
NI available to common/average common equity
Revenue/Average Fixed Assets

43. Quick Ratio
CFO/average total equity
NI/total capital
CFO/average total assets
Cash+Marketable Securities+ Receivables)/Current Liabilities

44. Number of days of payable
365/payable turnover ratio
ROCE - ROA
(NI-preferred dividends)/weighted average of common shares
Cash+Marketable Securities+ Receivables)/Current Liabilities

45. Defensive interval
(Cash+Marketable securities+Receivables)/Average Daily Expenditures
(NI-preferred dividends)+(convertible preferred dividends)+(convertible debt interest)*(1-T)/(weighted average of common shares+conv. preferred shares+conv.of debt+issuable from stock option)
Total debt/(Total debt+Total shareholders equity)
CFO/Total debt

46. Return on Asset
NI/Average Total assets or [NI+interest expense(1-T)]/average total assets
Gross Profit/Revenue
CFO-fixed capital investment+net borrowing
CFO/cash outflows from investing and financing

47. Cash Conversion Cycle
CA/CL
(days sales outstanding)+(Days of Inventory on hand)-(Number of days payable)
NI available to common/average common equity
Annual Sales/Average receivables

48. Reinvestment
CFO/cash paid for long term asset
CA/CL
NI/average total equity
CFO/cash long-term debt repayment

49. Diluted EPS
365/receivables turnover
365/payable turnover ratio
[(Orginal Cost-Salvage)/Life in output units] * output units in production
(NI-preferred dividends)+(convertible preferred dividends)+(convertible debt interest)*(1-T)/(weighted average of common shares+conv. preferred shares+conv.of debt+issuable from stock option)

50. Current Ratio
CFO/cash outflows from investing and financing
NI/average total equity
CA/CL
(2/useful life)*(Cost-Depreciation)