FI 3300 FINAL EXAM

Assets

Current Assets - cash - net accounts receivable (gross - allowance for doubtful accounts) - Inventories Long term assets - Net fixed assets (gross fixed assets - less accumulated depreciation) = total assets

Liabilities

Current liabilities - notes payable - accounts payable - accrued expenses - current portion long term debt Long term liabilities - long term debt (less current portion) = total liabilites

Stockholder's equity

Common stock Preferred stock Additional paid in capital Retained earnings = total equity

Net accounts receivable

Gross accounts receivable - allowance for doubtful accounts

Net fixed assets

net fixed assets = gross fixed assets - accumulated depreciation

Annual addition to retained earnings

Annual addition to RE = Net income - dividend payout

Year end Retained earnings

year end RE = beginning RE + annual addition to RE

Cost of goods sold

COGS = Beginning inv + material purchases - ending inv

Net sales

Gross sales - sales returns & allowances

Debt to equity ratio

total liabilities / equity

Income statement

Net sales - COGS = Gross profit - operating expenses (less depreciation if retail biz) = Operating profit (EBIT) - interest expense = EBT (earnings before taxes) - taxes = Net Income

OpEx

1. Management salaries 2. R&D 3. Lease payments 4. Repairs & Maintenance 5. General and admin expenses

Common size income statement

Income statement item / net sales

Common size balance sheet

Balance sheet item / total assets

Tax equivalent yield

= tax free yield / (1 - tax rate)

Required rate of return

R(equity) = R(risk free) + B(Rm - Rf)M

Market risk premium

= Rm - Rf

WACC

Weight of Debt ((1 - tax rate)(Rdebt) + Weight of equity (rate of equity)

CFO - Cash flow from ops

Net income + Depreciation - increase in assets (AR/Inventories) + increase in liabilities (AP/accruals)

CFI - Cash flow from investments

0 Change in Gross fixed assets (Change in net fixed assets + current year dep) +/-

CFF - Cash flow from financing

0 +/- Change in notes payable, CLTD, LTD, Stock, additional paid in capital - Dividend (= NI - Change in RE)