FINA Exam 1
Last Modified: 2014-06-15
how much earned before interest and taxes from each dollar of sales
operating income / sales
fraction of each dollar in rev. availiable to equity holders after the firm pays interest of taxes
current assets/current liabilities
CA>CL = good
most stringen LR
High - more effective (same amt of sales w/less assets)
small - more captial need to invest in company to generate sales
Total assets include assets that are directly involved in generating sales.
Ability to get as many sales as possible with few resources
shorter is best - # of days from raw mat. to finished products
how easily a firm covers interest payments
Asses whether a stock os over or under values based on the value of stock proportional to the earnings it can generate.
Expected growth of the company
set by the issuer and stated on bond
coupon rate * face value / # pay/yr
Enter N, PV, PMT, & FV
solve for I
fixed, no voting right
comes before common
the dividend discount model values stock based on future dividends, but a firm's future dividends are very uncertain
most companies don't pay dividends
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