EEE 4653 Exam 3
EEE 4653 Exam 3 Income Statement - ANS -Profitability (revenue-expense) Gross profit EBITA Internal capital generation Income Statement assumptions - ANS --Revenue/COGS buildup -Staffing plan -SG&A (operating) expenses Balance Sheet - ANS -Stability -aggregate assets and funding source or ownership -single specific point in time -business income tax benefits Balance sheet assumptions - ANS --Working capital (# days acct. receivables, # days inventory, # days acct. payable) - Long term investments - Capital funding/repayments Cash flow - ANS -Cash liquidity- the bottom line Opperating cash flow Working capital Long term capital Funding sources + beginning cash = ending cash balance Financial projection analysis - ANS --Used to examine ratios to benchmark and provide comparability -analysis revolves around income statement and balance sheet (not cash flow) -Evalute financial business trend lines by each item Breakeven formula - ANS -Total SG&A expenses/Gross profit margin = $ in revenues needed - Answer/unit price= Units needed Cash Runway (Months of cash coverage) - ANS -Cash balance/Current toal monthly SG&A Burn Rate ( Net months of cash coverage) - ANS -Cash balance/(Monthly SG&A - Average montly gross profits) -Includes profits so you can see how fast you will use your money Targeted equity investors ROIs (Proof of concept) - ANS -Years to exit:7
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