Diluted EPS for convertible debt's numerator : have only NI+_____-______ (Int not paid if CB is converted)

(NI+AT int-Pref Div) / Weighted shares+New Shares

Diluted EPS for stock options's numerator have _________?

(NI-Pref Div) / Weighted shares+ New Shares

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CFA L1

Question	Answer
Audits: Unqualified is _______than Qualified & Adverse	Better
Role of financial statement analysis is to form ________ about company's future performance	Expectations
(Accounting policies, methods, and estimates) are found in ________in financial statements	Notes
What audit is better (Qualified or Unqualified)?______	Unqualified
________: 100% good exept minor errors	Qualified
Interim financial statements are audited or unaudited?	Unaudited
___SB is standard for IFRS	IASB
___SB is standard for US GAAP	FASB
_____: Any company that issue securities are regulated by this organizaiton	SEC
10-K is _______	Annual Report
_______basis: Transactions recognized when they occur, not when cashflow occur	Accrual
______Cost: Cash paid at the time of acquisiton	Historical
Required Fin statements: -Statement of financial position -Statement of ________ income - Statement of changes in equity	Comprehensive
_____ are included in audited financial statements	Footnotes
Under IFRS, addressing company's key relationship is _________	Recommended
______the data: is adjustments to financial statements and calculating ratios	Process
Processing the data includes 1)Adjustments to financial statments 2) preparing exhibits such as ______	Graphs
1st step of financial statements analysis is _____ the objective	State
Accounts _______ is payment after delivery	Receivable
Performance obligation is a ______ G&S	Distinct
Product cost expense is COGS while period cost includes _____, and Admin(operations related)	Depreciation
Doubtful Account: Estimated _________ amount	Uncollectable
Direct wirte-off method: Only when ______ occurs	Default
Physical Assets depreciation: Depreciation while Intangible assets inclue ______(Patent)	Amortization
Goodwill: Intangible with _____ lives	indefinate
EPS: IFRS have ordinary shares while GAAP use ______ shares	Common
Accelerated Depreciting method: have _____ depreciation in early years	More
Basic EPS= (NI-______)/Time weighted avg shares	Pref Dividends
Diluted EPS for convertible securities: Have only_____ in numerator	NI
Diluted EPS for convertible debt's numerator : have only NI+_____-______ (Int not paid if CB is converted)	(NI+AT int-Pref Div) / Weighted shares+New Shares
Diluted EPS for stock options's numerator have _________?	(NI-Pref Div) / Weighted shares+ New Shares
Diluted EPS stock options New shares= Option ____ shares- (Option value/P)	Total
Anti-dilutive rule: Diluted EPS is always ______ than Basic EPS	Smaller
Expenses on income statement may be grouped by ______ function or nature	Either
Between Int expenses & COGS, which is expense clssification by function: ______?	COGS
Under IFRS, common inventory method is ______.IFRS does not allow LIFO inventory method.	FIFO
Double-declining method: Depr rate* _____ cost (Do not subtract Residual Value)	Purchase
Which depr methos is most consevative? Declaining balance depr + a _______ useful life	Shrot
Under IFRS, a loss from destruction of property in fire would be ______ operations (Unless property is totally destroyed)	Continuing
Foreiign _______ translation adjustments is classified as Other Comprehensive Income (OCI)	Currency
TCI=NI+OCI, OCI stands for _______ Comprehensive Income	Other
IASB: ______ representation & Relevance	Faithful
IFRS requires statements to report ______(Period)	Annually
IASB framework includes: timeliness. comparability, and _____fiability (Assurance:X)	Verifiability
IAS No.1 requires B.S., comprehensive income, cf statement, statement of changes in equity (Matreial Events are ____ included)	Not
2 Assumptions of IASB are _____ concern & ______ accounting	Going/Accurual
Current Assets have time period less than 1 _____ or 1 operating cycle	1 Year
Current Asset: Cash/Cash Equivalents have a time period of less than ____ days	90 days
Concentration of credit risk is reported in ______	Notes
IFRS Inventory: which is lower, cost or net ______ value (Selling price-Selling cost)	Realizable
GAAP Inventories: LIFO or retail inventory (Measured at lower cost or ____ value)	Mkt value
Written down inventroy method are reversed when sold. COGS _____ while Inventory decrease	Increase
Accounts Payable= _______ Payables	Trade
Accrued expense: Expense incured but not _____ paid	Yet
Property Plant and Equipment (PPE) Recoverable amount is the _______ # between (FV-costs to sell) or (PV value)	Higher
______ developed intangible assets may not be recognized on B.S.	Internally
Intangible assets (Only IFRS):- costs during _______ phase are expenses while -costs during _______ phase may be capitalized	Research/Development
Goodwill: Excess over _____ value of acquiring another company	Fair
When P is ____ than net identifiable assetss, the resi is Accounting Goodwill	Bigger
Goodwill impact is typically _____ed for analysis	Removed
Financial Assets. You only amortize _____, others are marked as fair value	Debt
FVPL stands for Fair-value Profit/loss, FVOCL can include equity and _______ assets	Debt
Deferred Tax Assets: Income tax Payable____tax Expense (Temporary)	>
Deferred Tax Liabilities: Tax Payable____Tax Expense	<
Equity # of shares 1) Authorized: # _____ to sell	Allowed
Retained Earnings: Cumulative amount of earnings ____ paid to owners	Not
Non-Controlling Interest: Equity amount ______ to balance the books	Added
Liquidity Ratios 1) Current=CA/CL 2) Quick= CA+___+___/CL 3) Cash=CA+MS/CL	MS+AR (MS=Mkt Securities)
Solvency Ratios: 1) Total Debt= D/A 2) Leverage=____/_____	L= A/E
presenting Current Assets & Liabilities is referred to as a _______ balance sheet	Classified
A bank uses a ________ based balance sheet	Liquidity
$ received from customers, while products are to be deliverd in the futures is recorded as ______ & liability on B.S.	ASSET
Most likely costs in PPE between (Storage and delivery) costs is ______ cost	Delivery
Goodwill is ____ a current asset	Not
________'s unrealized gains and losses flow through from income into retained earnings	Securities
Assets classified as _______ for sale's unrealized gains and losses are components in other comprehensive income	Available
Minority interest is ______ of shareholders' equity	Part
Increase in Treasuty stocks will have both a _______ in Assets and Equity	Reduction
Between (Cash Ratio & Quick ratio) the most stringent liquidity test is ______ ratio	Cash
Complex Captial Structures means a firm has _______ securities	Convertible
Warrants: If average price ______ then it is dilutive	Increase
Converged accounting standards are ________ based	Principle
Stock options are dilutive if strike, X< ____ Mkt Price	Avg
D EPS=(NI___P.DIV___Conv Div___Int(1-t)) / W+New	(NI-P.DIV+Conv.Div+Int(1-t))
B.EPS= (NI__P.DIV)/W	(NI-P.FIV)/W
Construction reported Profit= ___ Finished* Profit Margin	%
Restructuring & Shut down costs are included in ______ income	Operating
Stock Options 1)shares=option-(option*strike)/____P 2) iF X>P, then option is not dilutive	Avg P
Intaangible assets with indefinite lives are tested for ________	Impairment
1000 shares of 10%, par$100 , pref dividend=______?	$10*1000=$10000
CFO 1)Direct Method: Accrual to cash basis 2)Indirect method: NI and ______ engineer	Reverse
Indirect Method: -Add Depr/Amor/Depletion AR/Inventory have _____ signs	Opposite
FCFF=CFO+Int(1-t)+FC Inv= NI+NCC+Int(1-t)-FCInv-____Inv	WC
Cashflow per share=(CFO-_____)/shares	P.DIV
CF Ratios's numerator always start with _______	CFO
-Securities held for trading: ________ -Securities held for investment: Investment	Operations
under US GAAP, ______ of dividned is a financing activity	Payment
Interest paid is only operating cash-flow under _______ while under IFRS may either be operating or financing	GAAP
Indirect methos is easier and _____ costly	Less
(CFO,CFI,CFF) Which can be prepared under both IFRS & GAAP? _____	CFO
CFO=Rev-______-chs in inv-wages-Int-taxes+chs in WC	COGS
Cash paid to supplier, increase in inventory> _____	+
Cash paid to supplier deals with COGS+ chs in _______+ chs in ______	Inventory & AP
Common size CF statement: Show each ____ item on CF statement as a ____ of ____ revenue	Line/%/Net
-Availabe for sale is recognized as Unrealized P&L -Trading security recognized as ______ Prices	Mkt
Working Capital=C___-CL	CA
Unimpaired goodwill is recognized at _______ cost	Historical
Equipments used in manufacturing process is recognized at _____ cost	Historical
1)Common size B.S. express items as % of _____ 2)Common size I.S. express itmes as % of sales	Assets
CF Ratio ;If numerator has interest, then it will be a form of interest ______ ratio	Coverage
Cross-sectional analysis= ______ analysis	Relative
1)Liquidity ratios: Ability to meet S.T. obligations 2)_________ ratios: Ability to meet L.T. obligations	Solvency
Inventory Turnover= _______/INV	COGS
Days of turnover's numerator is ______?	365
Cash conversion cycle lower days means _____ ratios	Better
leverage ratio=A/E, ytpically use period _____TA/TE	End
Profit Margin's denominator is _______	Revenue
ROA=____?	NI/A
ROE=_____? E includes Minority and common equity	NI/E
Activity ratios: DOH(Days Inventory on Hand)= 365/_______	365/Inv Turnover
Days Sales Outstanding(DSO)=365/ _____	365/R
Debt to Equity=D/E, Debt to Capital=D/(___+___)	(D+E)
ROE=NI/E or _____*L	ROA
Retention rate: b=1-____ rate	Dividend
g=_____*b, g is sustainagle grwoth rate without debt	ROE
Segment reporting: IFRS/GAAP segment ino is ______	Required
Receivable Turnover= _____/AR	Rev
Turnover ratio's numerator is ____	Rev
ROE=ROAL ROA=____Asset turnover	NPM (Net Profit Margin)
Under GAAP, int payments are considered to be ______ cashflow	Operating
Under GAAP, 1)Cash dividend is financing 2)Preferred Dividend is _______?	Operations
FCFF="NNIIW"=_______?	N.I.+Non cash+AT Int-Inv-WC
Operations, +AP=+, +deferred taxes=+, Profit on sale of equipment(+)= (____)	(-)
Common-size CF statements shows CF as a % of Revenue or ____ cash inflows	All
Int Payable(+)=Int Expense(___)	(+)
Direct Method CFO-Indirect Method CFO=_____?	0
A non-cash transaction is disclosed in a ______ in CF statement (Example: Convert CB to common shares)	Footnote
Under GAAP, Int income is considered ______ cash-flow	Operating
Sale of equipemnt is considered __________ CF	Investing
Reinvestment ratio= (CF___)/PPR	CFO
Equipment sold with a gain(+) = (____)?	(-)
After storing in warehouse, all other costs are _____ cost	Period
Costs for storing finished goods inventory is a _____ cost	Period
FIFO, ____est inventory are sold first. Newest in Ending Inventory	Oldest
if costs are increasing, LIFO has higher ______, lower gross_____	COGS, GI
LIFO ______: Units sold faster than new inventory coming in	Liquidation
Inv adjustments: Inv measured at of lower cost or ___ realizable balue	Net
_____allows a reversal after an inventroy writedown, while GAAP does not	IFRS
Inv Turnover=(____)/Inv	COGS
DOH=365/(____)	Inv T
Gross Profit Margin=GP/(___)	R
ROE=NI/E=ROAL=NPM____	AT(Asset Turnover)
Quick ratio= (CA+MS+AR-_____ )/CL	Inv
Company internal liquidity ratio=_______ ratio	Current
Inv Turnover=COGS/Inv= COGS/(B.Inv+E.Inv)/____?	2
Cash conversion cycle= Time to sell inventory and collect AR____ Time to recieve _____ purchases	(-)/ Credit
Cash conversion cycle= 365/ (Rec___Inv___Payables)	(Rec+Inv-Payables)
Transportation shipping cost is ____ included in inv cost	Not
Which inventory system incur most significant costs: _____?	LIFO
Draw "LFIC" Chart in rising prices & declining prices	"LFIC" Chart
In declining prices, _____ will have highest profits	LIFO
Effects of reversing inv write-down: Inv(____) & COGS (___)	(+)&(-)
In rising inv costs, LIFO is more _____	Efficient
______ PRODUCTs carrying inv can be above its historical costs	Agricultural
Under IFRS, Inv write-down reversal can be increased to a maximum of _______ cost	Historical
PPE acquisition costs include puirchase price, delivery costs, installation; but staff _____ costs are not included	Training
When expensed, CA/NI/RE are _____	Decreased
IFRS development costs can be capitalized, but under GAAP, only ______ development can be capitalized	Software
Capitalizing effects: 1) ____Effect & 2) CFI effect Expensing effect: 1) I.S. Effect	B.S.
Capitalizing will have higher _____ in 1st year	N.I.
Units of production depr= Production/____ capacity* Depr cost	Total
Revaluation model(IFRS only): List carrying amount to _____	FV
1) Revalaution below cost: Loss to _____ 2) Revaluation above costs: gain to _____	I.S. & OCI
Impairment: Unanticipated ____ in asset value	Decline
Selling price= ______ value+ gain or loss selling equipment	Carrying
_____ training costs is not included in total costs of machine	Staff
Other costs are capitalized, Training costs are _____	Expensed
loan # Capitalized=Int___Int Earned (+ or -)	(-)
Copyright and goodwill have a(n) __________ life	Indefinite
Intangible assets are expensed when they are ________ developed	Internally
Calculate Double-decline depr expense: 1) Calculate Carrying value till (n__1) 2) Find Dep expense	(n-1)
Under IFRS, impairment loss on PPE is excess of carrying amount ____the asset's recoverable amount	Over
Impairment of intangible assets affects ______ the B.S. & I.S.	Both
Under GAAP, estimated _______expense is a required financial statement disclosure	Amortization
Investment property characteristic: It earns _____	Rent
Under GAAP, a wrtie down of inv to net realizable value will cause COGS to _______ (EI=BI+Purchase-COGS)	Increase
Weighted COGS= (__/__) * Sales	(TV/TU)
______ is the same for periodic & perpetual inventory system	FIFO
Perpetual Inv system will use up ______ of the purchases	Each
FIFO COGS=LIFO COGS____ (End LIFO-Beg LIFO)	(-)
Ending Inv=B___P____S	B+P-S
"FBF, LBL" FIFO will use B.I. ______. LIFO will use B.I. ______	First/Last "FBF,LBL"
Gross Profit=Sales(___)COGS	(-)
Increase in DTA: _____ Tax expense & higher revenue Increase in DTL: _____er tax expense & Lower Revenue	Higher/Lower
If tax rate increase, _____ DTA & DTL will increase	Both
Under DTA, when tax rates down: A__, ITE up, E__ (A=L+E)	A down, E down
Revaluation of property above costs: _____	OCI
Assets: ITE / DTA Credits: IT__ & DTL	ITP
We need to +DT___to balance when: EBT>TI, ITE>TP, CV>TB	DTL
ITE=ITP(__)DTL(___)DTA	ITP-DTA+DTL
ITE=TP+____-_____	+DTL-DTA
$180K in accounting & $160K in TB with 30% tax rate results in $______ in DTL. R>TB=Debit>Credit	$6000
Donations will set up ______ DTL nor DTA	Neither.
An increase in tax rate will raise _____ DTA & DTL and vice versa	Both
Tax credits has ____ effect on deferred taxes, either tax asset or tax liability	No
Analysts should treat deferred tax liabilities that are expected to reverse as liability. (Yes or No) _____?	Yes
Under GAAP, contra account of DTA is (Valuation Account) abbreviation =_____?	VA
When VA decrease, expectations of future earning power has ______ed	Increased
Effective Tax rate= Tax Expense/(____) =E/(EB___)	EBT
Effective int rate= Mkt int rate in bonds of _____ risk and terms	Comparable
Bond Amortization: Carrying value after 1 year's N=___-1	(N-1)
When coupon rate> composable risk and term rate. Assuming annual PMT is $700K. Under the effective interest rate method, int expense is _____ $700K. (Opposite of bond price)	E<$700K
Effective rate method's Interest Expense=(PV*Mkt rate)___Coupon Int	(PV*Mkt R)- Coupon
Straight line method's Int Exp=PMT-(___-____)/Years	(PV-FV)
Zero-coupon bond's par value rises as maturity nears, the Debt-Equity ratio _____ as maturity nears	Rises
If a company buy $6.5 Mil of callable bonds with a carrying-value of $9.8 Mil. Then the gain is recorded as (I.S. or OCI)____?	I.S.
Debt covenant least likely place restrictions to issue additional(Debt ot Equity) ______?	Equity
______ lease is when a lessor's asset appears on B.S. and continues to be depreciated(Ownership)	Operating
A _____-type lease will ahve highest revenues under GAAP	Sales
A lessee will list asset's _____ since the inception of lease on B.S.	PV
____(Assets-obligation) is reported in DB pension plan	Net
Defined benefit plan will show Net B.S.=(FV of assets)- (__ of _____)	(PV of obligations)
Debt is _____ only a liability (It is a long term liability)	Not
Affirmative Covenant: List what the company can do. _______ Covenant list what the company cannot do.	Negative Covenant
Lessor: _____ of asset. Lessee: User of asset(Have economic benefit)	Owner
Financial Lease(Transfer ownership, option to purchase, PV= most of FV, etc) & other leases are _____ lease	Operating
DC pension plan's expense is in I.S. while DB pension is a(n) ______ to pay future benefits (Liability )	Obligation
Fair-value model: ____ P/L is recorded in I.S.	All
Expensing vs Capitalizing: Capitalizing results in ____ N.I. & ______ ROA	Lower NI/ Lower ROA
Capitalizign Effects: -lower NI reflects depr expense - Recognized as asset on BS. Therefore A is ____	Up
Find Double Declining Expense=CV * Depr rate 1) Find CV by using (P*depr) until (____)	N-1
If P=$100K, and Useful life=5. Then Double Depr rate=___/5	2/5
Capitalizing costs ____ cashflow & ______ income variability	Lowers & Lowers
Acquired patents is an intangible assets with _____ life. Trademarks that can be renewed at minimal cost is intanible asset with ____ life	Finite/Infinite
Expense a purchase is recorded as CF___ while ______ a purchase is recorded as CFI	O/Capitalizing
Pro-_____: No Universal Guidelines, company's own rules	Forma
Pro-Forma excludes ______/amort, restructuring cotst, and one-tiem changes	Depr
FOB Source: Ownership transfer at home, Sale is recognized_____	Sooner
FOB destination: Rev recognized later, earnings are _____er	Smoother
Deffered tax asset's cpmtra-account is ______ account	Valuation
Non-recurring activities indicated lower quality (Earnings or Finanical Reporting)______?	Earnings
Optimal Financial Reporting uses (Conservative or Neutral) ______ accounting choices?	Neutral
Lowest level financial reprots have ____cious events	Ficticious
Aggressive accounting will have ____er performance tweaked	Better
Conservative accounting will have ______ financial performance	Lower
Bond covenant violation will motivate CEO in inflate reported ______?	Earnings
Aggressive accrual accounting, shift current expenses to future periods, where CFO/NI will _______ each year	Decrease
Low cost strategy will have high volume, and _____ margin	Low
Volume and Profit margin have an ______ relationship	Opposite
Available for sale____,trading _______ is reported in which income statements	OCI/IS
AR balance= Credit Sales/(____)* # of days to collect	CS/365*Days
IFRS does _____ allow LIFO	Not
Convert LIFO to FIFO=Inv+ LIFO _________	Reserve
DTA or DTL = Difference between [I.S. Income (A) & _______ Income(L)]* tax rate	Tax
If straight line depr is applied to financial reporting & Double-depr is for tax purposes, then tax payable uses _____ Depreciation method	Double-Depr
Tax Payables=(R-Depr)*tax rate "RDT" Tax Payables's Depreciation value use ____ purpose's Income	Tax
A tax loss carryforward is best described as net taxable loss used to reduce taxable income in the _____	Future
An increase in tax rate will ______ DTA or DTL	Increase
DTA or DTL at the end of year 3= ______difference in sum of (DTA-DTL)* New tax rate	Cumulative
Only IFRS allows _____tively tax rate to value DTA or DTL	Substantively
DTA or DTL = Difference in (Cash TI & _____ TI after subtracting expenses) * tax rate	Accrual
Uncollectable doutful debts will not be written off in AR unless doubtful debts are _____less	Worthless
If DTL is not reversed, is will be treated as _____(L or E)	E
Interest Expense= ____* (Mkt r/Frequency)	PV
If coupon is semi-annual there will be ____ int expenses each year	2
Cash-flow from ______=Coupon PMT	Operations
Repayment of principal in a lease must be a _____ cash-flow	Financing
The Mkt interest rate is least likely be disclosed on B.S. is (Right or Wrong)___?	Right
The 3 conditions that lead to low-quality financial _____ are opportunity, motivation, and rationalization	Reporting
When earnings are higher than expected, mgmt will make ______ accounting choices	Conservative
When the firm must meet accounting rules to comply with debt covenants: ______ accounting policies will apply	Aggressive
When a firm's financial reports are low quality, users (Can or Cannot ) ____ access the quality of the ifrm's earnings	Cannot
A company will manipulate interest coverage ratio, and debt convenant to _____ earnings or understae liabilities	Overstate
To estimate pro-forma cash-flows, non cash working capital will remain _____	Constant
IT(Turnover)=365/(___)or 365/Days of inv on hand. Inv=(____)/(____)	D & COGS/IT
A decrease in INV is a (Source or Use) ____ of cash	Source

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