Financial Analysis
Financial Analysis
Financial Analysis
Fichier Détails
| Cartes-fiches | 288 |
|---|---|
| Langue | English |
| Catégorie | Finances |
| Niveau | Université |
| Crée / Actualisé | 06.01.2017 / 10.03.2017 |
| Lien de web |
https://card2brain.ch/box/20170106_financial_analysis
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Determine the recognized revenue with basis
a) sales
b) percentage-of-completion
c) completed contract
d) cost recovery
e) installment sales at year-end
Duration 3 years; Down payment: USD 100m; Costs: USD 520m; Price: USD 600m; Expenses: 30% / 50 % / 20%
Cost recovery
erläuterung
kosten anteilig
installment sales
erläuterung
Umsatz darf in der Höhe angesetzt werden, wie man cash erhält
Revenue Recognition
Ziel
--> Gewinn ausweisen durch zuweisen von Aufwand zu Erträgen
Net profit margin =
Net Income / Sales
Gross profit margin =
Gross Profit / Sales
What is the net revenue and gross profit reported? Determine the gross profit margin
Revenue: USD 1m Cash collected: USD 800k
Returns of goods sold: USD 100k CoGS: USD 700k
Revenue USD 900k
Gross profit USD 200k
Gross profit margin 22%
Under IFRS, a loss from destruction of property in a fire would most likely be classified as
What is the most conservative method in the year the depreciable asset is acquired?
Which of the following is not necessary to recognize revenues?
YourCo has a contract to build a building for USD 100.000 with an estimated time to completion of three years.
Reliable costs are USD 60000. In the first year cost totaling USD 24000.
What profit will be reported in year 1 under
a) percentage-of-completion
b) completed-contract method?
a) USD16000
b) USD 0
Cash Flow from Operating Activities (CFO) includes
the company’s day-to-day business that create revenues such as selling inventory or providing services
Cash Flow from Investing Activities (CFI) includes
purchasing and selling property, plant, and equipment, intangible assets, and other long-term assets
Cash Flow from Financing Activities (CFF) includes
obtaining or repaying equity or debt capital
The following B/S and I/S items (changes) are classified as CFO, CFI, or CFF
a) Marketable securities
b) Dividends
c) Interest paid / received
d) Inventories
a) CFI
b) CFF
c) CFO(U.S.GAAP); CFO/CFF (IFRS)
d) CFO
Sale of land would be classified
a) CFI
b) CFF
c) No cash flow impact
a) is correct
c) might be correct if the sale is not for cash
A firm’s sales are USD 3.000, cash expenses (incl. taxes) are USD 1.400, depreciation is USD 500, and accounts receivable increase by USD 400. The CFO results to?
Sales -Cash expenses - ΔAccounts receivable
= 3000 - 1400 - 400
= $ 1200
formats for reporting cash flows under both U.S. GAAP
and IFRS
explanation
the direct and the indirect method
- calculation of CFI and CFF is the same under both methods
- direct method shows the specific cash inflows and outflows. The income
statement items are adjusted to remove the effect of accruals - indirect method derives the cash flow from reported net income as a result of
a series of adjustments- indirect method is used for forecasting future cash flows
Free cash flow
explanation, usage, formulars
Free cash flow (FCF) measures the cash available for discretionary purposes. This figure is often used for valuation
Performance ratios
Cash flow to revenue
measures the cash generated per dollar of revenue
= CF= / Revenue
Performance ratios
Cash return on assets
expl, formular
measures the cash generated from all resources
= CFO / total assets
Performance Ratios
Cash return on equity
expl, formular
measures the cash generated from owners resources
= CFO / shareholders' equity
Performance ratios
Cash to income
expl, formular
measures the cash-generating ability of operations
= CFO / operating income
Performance Ratios
Cash flow per share
measures the operating cash flow on a per share basis
(CFO - Div_ Preferred) / (# of common shares outstanding)
Performance ratios
- Cash flow to revenue
- Cash return on assets
- Cash return on equity
- Cash to income
- Cash flow per share
Coverage Ratios
- Debt coverage
- Interest coverage
- Reinvestment measures
- Debt payment
- Dividend payment
- Investing and financing
Debt coverage
expl, formular
measures financial risk and financial leverage
= CFO / total debt
Interest coverage
expl, formular
measures the ability to meet interest obligations
= (CFO + I + Taxes) / I
Reinvestment
expl, formular
measures the ability to acquire assets with operating cash flow
= CFO / (Cash paid for long-term assets)
Debt payment
expl, formular
measures the ability to repay debt with operating cash flows
= CFO / Long term debt repayment
Dividend payment
expl, formular
measures the ability to pay dividends with operating cash flow
= CFO / Div
Investing and financing
expl, formular
measures the ability to acquire assets, pay debts, and make distribution to owners
= CFO / (CFI_outflow + CFF_outflow)
Which format is preferred from a) an analysts and from b) a companies view to report cash flows?
a) direct
b) indirect
Which cash flow component may be prepared under direct and indirect method under IFRS and U.S. GAAP?
a) Operating
b) Investing
c) Financing
For IFRS as well as for U.S.GAAP the operating cash flow can be prepared under direct and indirect format. For the other components only direct method is applicable
YourCo reports wage expenses of USD 20m. The beginning balance of wages payable was USD 3m and the closing balance amounts to USD 1m.
What is the cash outflow related to wages?
How would this cash flow be classified?
Beginning balance wages payable + wage expenses - cash paid = Ending balance wages payable
3 20 -1 USD 22m
CFO
Which is an appropriate method of preparing common size cash flow statements?
a) Showeach line as percentage of net revenue
b) Show each item of cash inflow as percentage of total inflows and each item of cash outflows as percentage of total outflows
Calculate CFO including the following numbers
Calculate FCF given the following numbers and assume current corporate tax of 25% is applicable
Earnings per share
expl, formular
amount of income available to common shareholders, hence after the distribution of preferred dividends, divided by the weighted average number of common shares outstanding over a period
EPS = ( NI - Div_pref ) / N
N = Weighted average number of shares outstanding
Formular EPS_Dil
(Dilution)
- For convertible stock outstanding [if-converted method]
- EPS_Dil = NI / ( N + N_Conv ) where N = Weighted average # of shares outstanding, N_Conv = Shares issued at conversion
- For convertible debt outstanding [if-converted method]
- EPS_Dil = (NI - Div_Pref + I_Conv) / ( N + N_Conv) where I_Conv = After tax interest on convertible debt
- For companies having stock options or warrants outstanding [treasury stock method]
- EPS = ( NI - Div_Pref ) / ( N + N_Conv - N_Purch ) where N = Weighted average number of shares outstanding; N_Conv = Shares issued at conversion; N_Purch = Shares that could be purchased with cash receipts
