CPA BEC comperehensive formulas

Study this set online at: http://www.cram.com/ashcards/cpa-bec-comperehensive-f

ormulas-831949

ADRs are receipts issued by a US bank which represents ownership

rights in

a foreign corporation

Accrued L + A/P + Current portion of long-term note payable =

=Current liabilities

At what rate company would be INDIFFERENT to the investment?

at the IRR CF * IRR ( or annuity factor)= PV of initial investment

Avg. Gross Receivable balance =

AVG daily sales x Avg collection period

Cash+ A/R + inventory =

Current Assets Prepaid assets - not CA

Cost of asset + increase in WC - tax saved - cash received from sa

le of old asset =

NET OF INVESTMENT

EBIT=

Total revenue - total Var. costs- total Fixed Costs

EVA % =

RCOE % - WACC %, where RCOE = Oper. income / capital, WACC =

Cost of debt + cost of equity

CPA BEC comperehensive formulas

Study this set online at: http://www.cram.com/ashcards/cpa-bec-comperehensive-f
ormulas-831949

FIXED OVERHEAD is a Product cost for ABSORPTION COSTING at th

e time of _________ and a PERIOD COST under Variable costing at ti
me of ________

SALE PRODUCTION

Gross Margin =

= ( unit price - unit cost ) x number of units

How do you solve the problem if CL is known and Current Ratio will
change from 1.75 to 1.5 to 1?

CA + inc in Inv / CL + inc in Inv. = 1.5

How to calculate conversion costs transfered to second department

using WA method and normal spoilage is given?

1) calc. Equivalent units= completed + spoiled + % completed of en

d units 2) Cost per Eq. unit = Total conversion costs / Eq. units 3) C
onversion costs transferred = Cost per unit x ( Good units + Norma
l spoilage)

If there is no provision for allocating losses ->

the method used to allocate prots will be used

Interest on long-term debt costs ______ than interrest on short-term

debt because

more of risk associated with longer maturity dates

Inventory T/Over ratio

= COGS/ AVG Inventory

Leverage refers to the amount of _________ in the rm's structure

Debt

CPA BEC comperehensive formulas

Study this set online at: http://www.cram.com/ashcards/cpa-bec-comperehensive-f
ormulas-831949

List major risks associated with the A/R component of the system?

Credit may be applied to improper accounts Updates of credit ratin

gs may be untimely Financial or management reporting may be ina
ccurate

Seasonality in data may be removed by calculating a

WEIGHTED AVERAGE of the data for the four seasonal time periods

The debt-to-equity ratio measures the

% of total nancing provided by creditors (debt) compared to nanc

ing by owners.

The implicit cost of debt nancing is the

increase in the cost of debt and equity as the debt-to-equity ration i

ncreases

The intercept value is where the line crosses the _____ axis.

Y axis

The interest coverage ratio measures the

rm's ability to make required interest payments. The higher - the

greater ability to repay the debt.

The return on Equity reects the

net income that accrued to owners

Treating dividends as a residual part of a nancial decision assume

s that

earnings should be retained and reinvested as long as protable pr

ojects are available

CPA BEC comperehensive formulas

Study this set online at: http://www.cram.com/ashcards/cpa-bec-comperehensive-f
ormulas-831949

What costs are relevant in decision making?

only INCREMENTAL (xed or variable)