Financial Analysis

Question 1

ROE Formula?

Answer 1

ROE = Net income/avg Shareholder‘s equity

Question 2

ROE and ROI relation?

Answer 2

ROE = ROI*leverage

Question 3

How does the Dupont Analysis decompose ROE?

Answer 3

ROE = Tax burden x Interest Burden x EBIT Margin x Total asset turnover x Leverage

Question 4

What are the formulas for the Dupont Analysis?

Answer 4

ROE = (Net income/Revenue)(Revenue/Tot Assets)(Tot assets/Avg equity)

Question 5

Inventory turnover?

Answer 5

COGS/Avg inventory

Question 6

DOH?

Answer 6

Nb of days/Avg inventory

Question 7

Receivables turnover?

Answer 7

Revenue/avg receivables

Question 8

Payables turnover?

Answer 8

CoGS/Avg trade payables

Question 9

Nb of days payable?

Answer 9

Nb of days/payables turnover

Question 10

Working capital turnover?

Answer 10

Revenue/avg working capital

Question 11

Fixed assets turnover

Answer 11

Revenue/avg net fixed assets

Question 12

Tot assets revenue

Answer 12

Revenue/avg tot assets

Question 13

Current ratio

Answer 13

Current assets/current liabilities

Question 14

Quick ratio

Answer 14

Cash+STM securities+receivables/current liabilities

Question 15

Cash ratio

Answer 15

Cash +STM securities/current liabilities

Question 16

Defensive interval ratio

Answer 16

Cash + STM securities+ receivables / daily cash expenditures

Question 17

Cash conversion cycle

Answer 17

DSO + DOH - Nb of days payable

Question 18

Financial Leverage ratio

Answer 18

Avg total assets/avg total equity