Formulas - M1,3,7,9,10
Percentage Change in NOI
DoOLx%ChangeS (CM/NOI)x%ChangeS
Times Interest Earned Ratio
EBIT/IE
What's the difference between EBIT and EBT?
EBT is Earnings Before Tax EBIT is Earnings Before Interest and Tax
Depreciation on production equipment
Product cost
Direct labor
Product cost
Direct materials
Product cost
Factory Overhead
Product cost
Factory depreciation
Product cost
Moving raw materials and WIP through production process
Product cost
Wages for production line workers
Product cost
Net Sales
S-R-D
Gross Profit
S-R-D-COGS
EBITDA
S-R-D-COGS-SGA
EBIT
S-R-D-COGS-SGA-D-A
EBT
S-R-D-COGS-SGA-D-A-IE
Net Income
S-R-D-COGS-SGA-D-A-IE-T
Contribution Margin
S-VC
Degree of Operating Leverage (Extended)
S-VC/S-VC-FC
Total Asset Turnover
S/ATA
Period Cost
SG&A
Accounts Receivable Turnover
SOA/AARB
Matching principle
Expenses must be matched to the revenue they generate
Dollar Sales to Break Even
FC/CMR
Unit Sales to Break Even
FC/UCM
Unit sales to break even
FC/UCM
Total Fixed Cost
Fixed MOH + Fixed SG&A
Depreciation
Fun trick question! Depreciation on PRODUCTION EQUIPMENT is a manufacturing or product cost. But depreication on the WAREHOUSE in which products are stored after being produced (but not in which products are being produced) is a period cost.
Gross Profit Margin
GM/S
Period costs are expensed when?
In the period in which they are incurred
Administrative expenses
Period cost
Depreciation on warehouse
Period cost
Executive salaries and benefits
Period cost
General expenses
Period cost
Interest expense (that is not capitalized into a fixed asset)
Period cost
Marketing expenses
Period cost
Moving FG to from warehouse to customers
Period cost
Office rent for administrative office
Period cost
Salaries to salespeople
Period cost
Sales commissions
Period cost
Selling expenses
Period cost
Travel and entertainment expense
Period cost
Warehouse depreciation
Period cost
Warehouse depreciation
Period cost; because the warehouse is just holding goods that have already been produced, it can't be a product costs. Product costs are for manufacturing costs.
Margin of Safety (dollars)
TBoA-BES
Breakeven Point (in Dollars)
TFC/CMR
Debt To Equity Ratio
TL/SE
T/F: The impact on NOI of any given dollar change in total sales can be computed by applying the CM ratio to the dollar change
TRUE
Book Value Per Share
TSE/#CSO
Product costs are expensed when?
At the time of sale of the goods. Because of the matching principle, which states that expenses must be matched to the revenue they generate, product costs can be expensed only when revenue from the sale of products is realized, a.k.a. debit COGM only when the products are sold
COGS
BI merchandise + Purchases - EI merchandise
Working Capital
CA-CL
Current Ratio
CA/CL
Degree of operating leverage
CM/NOI
Contribution Margin Ratio
CM/S (S-VC)/S UCM/P 1-VER 1-(VC/S)
Change in Profit
CMRxChangeS-ChangeFCs
Change in Contribution Margin
CMR×ChangeS
Inventory Turnover
COGS/AIB
Product Costs
Costs incurred while acquiring or manufacturing products. These costs are often treated as inventory and don't appear on the I.S. until the final product is sold, so they're also called "inventoriable costs." Product costs, on the other hand, are capitalized as inventory on the balance sheet. Raw materials are not expensed when they are purchased. Manufacturers debit their raw materials inventory account when the purchase is made and credit their cash account. These capitalized assets show up on the balance sheet. (MyAccountingCourse)
Conversion Cost
DL + MOH
Prime Cost
DM + DL
Product Cost
DM + DL + MOH
Variable Manufacturing Cost
DM + DL + VMOH
Dividend Payout Ratio
DPS/EPS
Dividend Yield Ratio
DPS/MPPS
Acid Test Ratio
(C+CE+MS+AR+STNR)/CL
High-Low Method
(HAC-LAC)/(HIU-LIU)
Margin of Safety Percentage
(MoSiD)/TBoAD
Return on Total Assets
(NI+(IEx(1-TR)))/ATA
Profit
(S-VC)-FC (PxQ-UVCxQ)-FC UCMxQ-FC CMRxS-FC
Dollar Sales to attain target profit
(TP+FC)/CMR
Unit sales to attain target profit
(TP+FC)/UCM
Average Collection Period
365/ART
Average Sale Period
365/IT
Operating Cycle
ASP+ACP
Equity Multiplier
ATA/ASE
Period Costs
All costs that aren't product costs. Costs not involved in production process. Because they're not part of production process, they're treated as actual expenses in the period in which they arise. Period costs are expensed on the income statement when they are incurred. Take advertising expenses for example. When a company spends money on an advertising campaign, it debits advertising expense and credits cash. These costs are directly expenses and reported on the income statement. (MyAccountingCourse)
NOI (net operating income) versus EBIT (earnings before interest and taxes): What's the difference?
I pulled this straight from Investopedia because it's such a good explanation "Net operating income (NOI) determines an entity's or property's revenue less all necessary operating expenses. NOI does not take into account interest, taxes, capital expenditures, depreciation and amortization expenses. Conversely, earnings before interest and taxes (EBIT) consists of revenues less expenses, excluding tax and interest, but takes into account depreciation and amortization expenses. It determines a company's profitability. EBIT is calculated by subtracting a company's cost of goods sold (COGS) and operating expenses from its revenue. EBIT can also be calculated as operating revenue and non-operating income less operating expenses. For example, assume company ABC generated $50 million in revenue, and had COGS of $20 million, depreciation expenses of $3 million, non-operating income of $1 million and maintenance expenses of $10 million during the last fiscal year. Its resulting EBIT for last year was $21 million ($50 million + $1 million - $10 million - $20 million). NOI is generally used to analyze the real estate market and a house's or building's ability to generate income. Real estate property can generate revenue from rent, parking fees, servicing and maintenance fees. A property may have operating expenses of insurance, property management fees, utility expenses, property taxes and janitorial fees. Income taxes do not impact a company's or real estate investment's NOI. However, property taxes are included in the operating expenses of a real estate investment's operating expenses. For example, assume an investor purchases an apartment building in an all-cash deal. The property generates $20 million dollars in rents and servicing fees. The apartment building has operating expenses that amounts to $5 million and depreciation expenses of $100,000 for its laundry machines. The resulting NOI generated by the apartment building is $15 million ($20 million - $5 million). But its EBIT is different. Remember, EBIT takes into account the depreciation expense, so the resulting EBIT generated by the apartment building is $14.9 million ($20 million - $5 million - $100,000). NOI also determines a property's capitalization rate, or rate of return. A property's capitalization is calculated by dividing its annual NOI by the potential total sale price. Assume our building has a sale price of $120 million. Its capitalization rate is 12.5%." Read more: NOI (net operating income) versus EBIT (earnings before interest and taxes): What's the difference? | Investopedia https://www.investopedia.com/ask/answers/061015/net-operating-income-noi-same-thing-earnings-interest-and-taxes-ebit.asp#ixzz5N9HQtpgS Follow us: Investopedia on Facebook
Price Earnings Ratio
MPPS/EPS
Operating leverage
Measure of how sensitive NOI is to a given percentage change in dollar sales. Operating leverage is a multiplier; if operating leverage is high, a small percentage increase in sales can produce a much larger percentage increase in NOI
Free Cash Flow
NCPbOA-CE-D
Earnings per Share
NI/A#CSO
Return on Equity
NI/ASE
Net Profit Margin Percentage
NI/S
Variable Expense Ratio
VC/S
