Four Major Financial Statements
Balance Sheet, Income Statements, Statement of Cash Flows, Statement of Retained Earnings
Balance sheet represents
a "snapshot" in time.
Income Statement represents
a "period" of time.
Formula for Approximating Cash Flow
NCF=Net Income + Depreciation + Amortization
Earnings Before Interest and Tax
Another Name for EBIT and its representation
Operating Income and Sustainability
Formula for NOPAT
EBIT * (1-T)
Four types of Financial Ratios
Liquidity, Asset Management, Debt Management, Profitability
Shows relationship between firms cash/current assets/liabilities. Ex: Current Ratio, Quick Ratio
Helps measure how effective firm uses assets. Ex: Inventory Turnover, Days Sales Outstanding
Determines firms leverage when involving debt. Ex: Deb Ratio, Debt to Equity Ratio
Helps figure out what percent the company made. Ex: Profit Margin on Sales/Return on Total Assets
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