FIN 311 Study Guide - Midterm Guide: Economic Value Added, Nopat, Current Liability

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pucemouse259

14 Dec 2019

School

University of Arizona

Department

Finance

Course

FIN 311

Professor

Homi Songur

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Document Summary

Free cash flow = [ebit(1-t) + depreciation & amortization] - [capex + nowc] Book value = acquisition cost - accumulated depreciation. Dividend per share = (payout ratio * income) / # of shares. Book value per share = (total equity - preferred stock) / # shares outstanding(share equ) Market value per share = market price per share / earnings per share. Market value added = (# of shares outstanding * stock price) - book value of equity. Economic value added = nopat - annual dollar cost of capital. = [ebit *(1 - tax rate) - (total invested capital * after tax% cost of capital)] earnings per share = ni / # outstanding shares. Ebit = op. income = total rev - cogs - op. expenses - depcrec. Net working capital = current assets - current liabilities. Net operating working capital = current assets - (current liabilities - notes payable) Net op profit after taxes (nopat) = ebit * (1-t)

Related Questions

Using the 10K https://www.chevron.com/-/media/chevron/annual-report/2016/2016-Annual-Report.pdf

Find the following ratios for Chevron for 2015

Current Ratio

Current Ratio = Current Assets / Current Liabilities

Quick Ratio

Quick ratio = (current assets â inventories) / current liabilities

Return on Equity

Return on Equity = Net Income/Shareholder's Equity

Debt-to-Equity Ratio

Debt - Equity Ratio = Total Liabilities / Shareholders' Equity

Inventory Turnover

Inventory Turnover= Sales/ Average Inventory

Earning per share

Earning per share= (Net Income -Dividends on Preferred Stocks)/ Average Outstanding Shares

Gross Margin

Gross Margin= (Revenue-Cost of Goods Sold)/Revenue

Price earning Ratio

Price earning Ratio= Market Value per Share / Earnings per Share

Return on Assets

Return on Assets= Net Income/Total Assets

Times Interest Earned

Times Interest Earned= EBIT/Total interest payable on bonds and other contractual debt.

blushwoodchuck368

Millions of USD (except for per share items)	2015	2014
Sales	$ 114,826	$ 114,960
Cost of Goods Sold	86,483	86,714
Gross Profit	28,343	28,246
Selling/General/Admin. Expenses, Total	22,663	22,053
Operating Income	5,680	6,193
Interrest and Taxes	2,336	2,600
Net Income	$ 3,344	$ 3,593


Market Price/Share	$ 65.68	$ 84.26
Shares Outstanding	3,210	3,210

Millions of USD (except for per share items)	As of 2015	As of 2014
Cash & Equivalents	$ 7,759	$ 6,012
Total Receivables, Net	5,813	6,096
Total Inventory	46,310	45,315
Prepaid Expenses	2,251	1,811
Total Current Assets	62,133	59,687
Property/Plant/Equipment, Total - Gross	138,614	142,830
Total Assets	$ 200,747	$ 202,517

Accounts Payable	37,224	36,347
Accrued Expenses	18,685	17,807
Notes Payable/Short Term Debt	799	3,517
Current Port. of LT Debt/Capital Leases	6,468	3,566
Other Current liabilities, Total	6,448	6,684
Total Current Liabilities	69,624	67,921
Total Long Term Debt	42,964	48,233
Deferred Income Tax	8,169	8,164
Minority Interest	3,416	5,111
Total Liabilities	124,173	129,429
Total Equity	76,574	73,088
Total Liabilities & Shareholders' Equity	200,747	202,517
	-	-
Total # Common Shares Outstanding	$ 3,227	$ 3,230

Category	Two Ratios from Each Category	Ratio	Formula	2015	2014
Liquidity	Current and Quick Ratio	Current	Current Assests/Current Liabilites
		Quick	(CA - Inventories)/Current Liabilites
Asset Management	Total Assets Turnover, Total Fixed Asset Turnover	Total Assets Turnover,	Sales/Total Assets
		Total Fixed Asset Turnover	Sales/Total Fixed Assets
Debt Management	Debt to Assets and Debt to Equity	Debt to Assets	Total Liabilities / Total Assests
		Debt to Equity	Total Liabilities / Common Stockholders Equity
Profitability Ratio	Return on Assets and Return on Equity	Return on Assets	Net Income/Total Assets
		Return on Equity	Net Income/Common Equity
Market Ratio	Earnings Per Share and Price to Earnings Ratio	Earnings Per Share	Net Income / Common Shares Outstanding
		Price to Earnings Ratio	Market Price of Shares/Earning Per Share

whitemoose644

Use the following information to answer the following questions.

ABC, Inc. Income Statement (in thousands)

December 31, 2014

Sales $200,000

Cost of goods sold 140,000

Gross profit on sales 60,000

Operating expenses 56,000

Operating income (EBIT) 4,000

Interest expense 1,000

Earnings before tax 3,000

Income tax 1,050

Net income available to common stockholders $1,950

Number of shares outstanding 1, 500

Market price per share $22

ABC, Inc. Balance Sheet (in thousands)

December 31, 2014

Assets

Cash $2,000

Accounts receivable 17,800

Inventories 8,700

Total current assets 28,500

Gross fixed assets 70,000

Accumulated depreciation 26,500

Net fixed assets 43,500

Total assets $72,000

Liabilities and Equity

Accounts payable $18,000

Accruals 13,350

Total current liabilities 31,350

Long-term debt 8,250

Total liabilities 39,600

Common stock (par value and paid in capital) 2,000

Retained earnings 30,400

Total stockholders' equity 32,400

Total liabilities and equity $72,000

Industry Key Ratios

Industry Average Ratios

Current ratio 1.1

Quick ratio 0.60

Days Sales Outstanding (DSO) 25 days

Fixed assets turnover 5.8

Total asset turnover 2.95

Liabilities-to-assets ratio 65%

Times-interest-earned 3.2

Net profit margin 1.3%

Return on equity 7.32%

Price/earnings ratio 20.38

Market/book ratio 3.19

Calculate current ratio and acid test ratio for the firm.

Calculate DSO, fixed assets turnover, and total asset turnover for the firm.

Calculate liabilities-to-assets ratio and times-interest-earned ratio for the firm.

Calculate net profit margin and return on equity for the firm.

Evaluate the performance of the firm in the following areas:

Liquidity management

Asset management

Debt management

Profitability management

When you explain the firm

skymallard37

FIN 311 Study Guide - Midterm Guide: Economic Value Added, Nopat, Current Liability

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