Business Administration 2257 - Final April Exam Cheat Sheet.docx

3 Pages
Unlock Document

Western University
Business Administration
Business Administration 2257
Gomez Gomez

Analysis LIQUIDIDTY: Measures the ability to meet short-term debts. Differentials Industry: Concerned with the efficiency of working capital investments— - watch out for Lows and Highs receivables, inventory and payables. Competition (inc. Ratios): Diff Inflows Consumer: Sales, Food, Retail, etc. Corporate (Pro vs. Con): Diff Outflows (separate cogs from others) DL, Op costs, annual marketing, ins, ultil = Net Cash Flow Diff Invest A/R= (diff credit sales/360 x A/R days) A/P= (diff cogs/360x A/P days) *NEGATIVE Statement of Cash Flows INV= (diff cogs/360 x inv days) Increase Decrease Assets, one time promo costs, etc. Return on Investment: Asset Use Source =Diff Investment Liability Source Use Equity Source Use ROI= NCF/Diff Inv – relates size of investment to recurring cash flows expected Operations: How much cash did we generate (use) from PB= Diff Inv/NCF – compare to benchmark our regular operations? NCFFO is companys main source of financing (is it pos/neg/sustain) – what are large sources + uses – do they match – canextend a/p to get "Return" can be loosely defined as the internal fin? amount of money available to pay the investors. If one of the "investors" is a Net Income (from previous IS) Add: (amort from IS) creditor (such as a bank), then payments G/L on Assets: Investment Utilization: Measures the balance between are made by way of interest. If the return A/R, INV, Pre, A/P sales/profit and assets (particularly fixed assets and inventory). generated is not sufficient to make these =NCFFOP interest payments, then the decisionwill likely be turned down. Financing: How much cash was generated through financing activities (debt or equity financing)? MATCH Loans, stock, personal investment Dividends: COSTS Fixed Costs: supervisor’s salary, rent, loan Variable Costs: direct labor, commission, materials Unit contribution = selling price – Variable cost per unit Contribution Margin Rate = sellingprice – Growth: Measures improvement (or decline in performancevariable costs/selling price Investing: Do sources meet expectations – is comp 
from year to year). Stability: Measures the balance between debt and equity. - Debt, in growing – are assets being used efficiently manageable amounts is good. - Debt financing allows ownership to NON Current ASS: Land, equipment, marketable sec = be retained and is cheaper than equity (i.e., debt payments— net cap ass account payments—dividends—are not deductible). However, too muchy debt increases the risk of insolvency. Margin of Safety= proj sales-b/e sales/proj sales NCF =SUM of three Beginning Cash (previous yr B.S.) Ending Cash: Cash Budget Projected Income Statement – FTYE 2009 July Aug Sept Oct Nov Dec Total Revenue (% or $ given) Add: Diff Sales Inflows: Collect:(diff sales) ar60dys x x 250000 “ “ “ COGS (% of old sales + diff cogs) Total In: =Gross Outflows: Salary: 40000yr/12 3333 “ “ “ “ “ 20000 Op Expenses: COGS: A/P 60 days 9250 “ “ “ “ 37000 Wages (same % + diff wages) Equip: 270000 X X X X X 270000 Util (same $ + diff ultil) Inventory (INV DAYS) X X 92500 X X X 92500 Ad (same $ + diff promo) ADD Ttl Out: Int Ex (same $ + (int% x diff inv)) SUM: NCF Amort (same $ + (diff inv/yrs)) Open Bal ------- 1. 2. NIBT: Close Bal 1. 2. 3. 3. Subtract: TAX Net Earnings:
More Less

Related notes for Business Administration 2257

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.