Acc502 Unit 4 Word Scramble
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| Question | Answer |
| What are the components to the Dupont Model for ROE? | NI/ Sales * Sales/ATA * ATA/ ASE = NI/ASE |
| What are the components of ROA using the Dupont Model? | (Net Income)/Sales * Sales/(Ave. Total Assets), basically Profit Margin * Asset Turnover |
| What's the main shortcoming of the Dupont model? | Doesn't distinguish between Operating and Nonoperating: Assets, Liabilities, Revenues, Expenses |
| What does NOPAT stand for? | Net Operating Profit After Tax ==> Net operating profit before taxes - taxes on operating profit. |
| What does NOA stand for? | Average Net Operating Assets |
| What is the Easton et al.'s equation for Operating Return? | NOPAT/ NOA |
| How does one find the taxes on operating profit? | Tax expense (from income statement) + Pretax net Nonoperating Expenses * statutory tax rate (- Pretax Net Nonperating Revenues * statutory tax rate) |
| What's the equation for Gross Profit Margin? | 1- (Cost of Goods Sold)/Sales |
| What's the equation for Inventory Days | 365/(COGS/Average Inventory) |
| What's the equation for Receivable Days | 365/(Sales/Avg Accts Rec) |
| What's the equation for Accounts payable days? | 365/(COGS/Avg AP) |
| From where is the cash to cash cycle measured? | Operating cycle, minues accounts payable days |
| What's the equation for interest coverage ratio | (Net income + Income tax expense +Interest Expense)/Interest expense |
| What is the current ratio, and what's the equation for it? | Shows the amount of assets to the liabilities, basically how much the copmany is leveraged. Current Assets/Current Liabilities |
| What is the quick ratio, and what's the equation for it? | (Cash + marketable securities + AR) / current liabilities |
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