ACTG 3000 Study Guide - Midterm Guide: Nopat, Cash Flow, Business Analysis
13 May 2016
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Chapter 1 framework for business analysis + valuation. Steps in business analysis: business strategy analysis 2. Chapter 2 strategy analysis (things that affects firm"s profitability) Goal: identify key profit drivers and business risks to assess the company"s profit potential at a qualitative level. Competitive strategy analysis: to build sustainable competitive adv: cost leadership or product differentiation. Operating working capital = (current assets excess cash and securities) (current liabilities current debt and current portion of. Key to remember: link accounting choices to business strategy. Chapter 5 financial analysis use financial data to evaluate current and past performance. Asset management - working capital management: short term liquidity: Roa broken down = (net profit/sales) * (sales/total assets) Roe traditional = (net profit/ total assets) * (total assets /equity) Nopat = earnings before income tax and interest * (1-tax rate) Gross profit margin = (sales cost of sales)/sales. Nopat margin = nopat/sales ebitda margin = ebitda/sales.
