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financial management exam 2

  1. how do you find NOPAT?
    EBIT (1-TAX RATE)
  2. WHAT IS THE ORDER OF SALES FROM SALES TO NI?
    • SALES
    • -COGS
    • -DEPRECIATION
    • ______________
    • EBIT
    • -I
    • ______
    • EBT
    • -T
    • ________
    • NI
  3. HOW DO YOU FIND FCF?
    NOPAT-NET INVESTMENT IN OPERATING CAPITAL
  4. WHAT IS ANOTHER WAY TO FIND FCF?
    • NOPAT-CHANGE IN NET OPERATING CAPITAL
    • =NOPAT-(CHANGE IN NOWC+NFA)
  5. WHAT IS ANOTHER WAY TO FIND FCF?
    • NOPAT+DEPRECIATION-(CHANGE IN NOWC+NFA+DEP)
    • =
    • operating cf-(CHANGE IN NOWC+GROSS FIXED ASSETS)
  6. HOW DO YOU FIND ROIC?
    • NOPAT
    • _______
    • O.C
  7. HOW DO YOU FIND ROA?
    NI/ASSETS
  8. WHAT DOES ROA MEAN?
    OVERALL RETURN ON ASSETS
  9. WHAT DOES ROIC MEAN?
    SIMPLY LOOKS AT OPERATING OF COMPANY
  10. WHAT DOES WACC MEAN?
    COST OF CAPITAL
  11. WHAT IS THE RULE ON RETURN -COST?
    • IF IT IS POSITIVE : )
    • IF IT IS NEGATIVE : (
  12. HOW DO YOU FIND EVA economic value added?
    • NOPAT-(WACC)(CAPITAL)
    • NOPAT/CAPITAL*CAPITAL-WACC*CAPITAL
  13. WHAT IS ANOTHER WAY TO FIND ROIC?
    NOPAT/CAPITAL
  14. WHAT IS ANOTHER WAY TO FIND EVA?
    • (ROIC-WACC)*CAPITAL
    • ROIC*CAPITAL-WACC*CAPITAL
  15. HOW DO YOU FIND MVA?
    (SHARES OUTSTANDING) (STOCK PRICE) - TOTAL COMMON EQUITY

    • *********OR*********
    • MV OF EQUITY-BV OF EQUITY
  16. WHAT DOES MVA MEAN?
    MARKET VALUE OF THE FIRM - EQUITY CAPITAL SUPPLIED BY SHAREHOLDERS
  17. WHAT IS THE RULE ON MV/BV?
    WE WANT IT TO BE GREATER THAN 1
  18. WHAT IS THE ORDER TO FIND FCF?
    • NOPAT
    • OC
    • NOC
    • NOWC
    • FCF
  19. HOW DO YOU FIND WACC?
    WD*RD*(1-T)+WP*RP+WS*RS
  20. HOW DO YOU FIND RS USING THE CAPM MODEL?
    RS= CHANGE IN RISK FREE RATE+BETA*MARKET PREMIUM RISK
  21. WHAT IS ANOTHER WAY TO FIND rRF?
    10 YEAR TREASURY YIELD
  22. WHAT IS ANOTHER WAY TO FIND rmp?
    return on s&p500-return on treasuy yield
  23. EQUITY FINANCING=STOCKS

    DEBT FINANCING= BONDS

    WHICH IS RISKIER?
    EQUITY BECAUSE STOCKS ARE RISKIER THAN BONDS
  24. IF rs-rd=RP: THEN
    rs=rd+RP
  25. what does rd mean?
    bond yield
  26. higher sales does what to afn?
    increases it
  27. higher dividend payout ratio does what to afn?
    increases it
  28. higher profit margin does what to AFN?
    decreases it
  29. higher capital intensity ratio does what to AFN?
    increases it
  30. paying suppliers sooner does what to AFN?
    increases it
Author
shorunke86
ID
48373
Card Set
financial management exam 2
Description
financial management exam 2
Updated

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