12 terms

Financial Management Final Exam

STUDY
PLAY
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
EBIT
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
Liquidity Ratios
Shows relationship between firms cash/current assets/liabilities. Ex: Current Ratio, Quick Ratio
Assets Management
Helps measure how effective firm uses assets. Ex: Inventory Turnover, Days Sales Outstanding
Debt Management
Determines firms leverage when involving debt. Ex: Deb Ratio, Debt to Equity Ratio
Profitability Ratios
Helps figure out what percent the company made. Ex: Profit Margin on Sales/Return on Total Assets