ADVENTIS FINANCIAL MODELING COURSE WITH 100% CORRECT ANSWERS.

Cash on Cash Multiple How much an investor receives in proceeds upon exiting the investment compared to its initial investment; it is not dependent on when the exit actually occurs Income Statement Presents the results from operations (profitability) over a period of time. Purpose is to show stakeholders whether the company made or lost money during the period being reported. Represents how revenues are transformed into Net Income. Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:00 / 0:00 Full screen Revenue The amount charged for the delivery of a good or service. Cost of Goods Sold (COGS) Direct cost of producing revenue (raw materials, etc). Gross Profit Revenue less cost of sales. Indicated how effeciently labor and supplies are used in production. Operating Expenses All other expenses required to run the business Non-Operating Expenses Expenses or income not related to the regular business of the company. Corporate Taxes Local and federal taxes the company incurs. Net Income (Net Earnings) Revenue less all expenses of the company; indicated the increase in shareholders value resulting from operations. Balance Sheet Shows and organizatios financial position at a particular point in time. It discloses the resources an organization controls (assets) and claims on those reasources (liabilities and equity). Accounts Receivable The amount owed to an organization from the sale of its product or services. Fixed Assets Value of assets and property that cannot easily be converted into cash. Accounts Payable Amount owed to an organization's vendors. Debt Amount of obligations owed to creditors. Equity Cumulative shareholder investment plus cumulative net income. Working Capital A measure of a company's efficiency and it's short-term financial health. Calculated as non-cash current assets less non-debt current liabilities. Net Debt Won't find this figure on the balance sheet but is an important concept. Equal to total debt less cash. Cashflow Statement Statement that shows how much cash is generated or lost during a period of time IT reconciles net income to change in cash. Shows how changes in the Balance Sheet and Income Statement affect cash into operating, investing and financing activities Depreciation and Amortization Method of allocating cost of an asset over its useful life for both accounting and tax purposes. Is a source of cash because it doesn't actually represent a cash expense. Change in Working Capital The change in working capital as a result of changes in non-cash current assets and all non-debt current liabilites. Share Repurchase Reacquisition by an organization of its own stock. Organization either retires the repurchases shares or keeps them as treasurey stock. Dividends A distribution of cash to current shareholders. Most often derived from a ___ per share amount as directed by the organization's board of directors. Downgrading or removing these could spell financial trouble, while constant, health ____ could signal financial health. Capital Expenditure Funds use by a company to purchase or upgrade physical assets such as PPE EBITDA Gives an indication of its current operational profitability. Widely used when assessing the performance of a company, as it allows for comparison of profitability between companies in a wide range of industries. Free Cash Flow Way of looking at a company's cash flow to see what is available for distribution to creditors and shareholders. Multiple ways of calculating, but common way is: cash flow from operating activities less Capital Expenditures. Current Ratio Current Assets / Current Liabilities - Indicates whether a company's short-term assets are readily available to pay off its short-term liabilities - Ratio from 1.5 - 3. is normal Cash Ratio Total Cash / Current Liabilities - Indicates a comany's ability to use cash to pay off its current liabilities - Ratio from 0.20 - 1.0 is normal Days Receivable Accounts Receivable / Annual Revenue x 365 - Average number of days an invoice is in accounts receivable before collection Asset Turnover Total Revenue / Total Assets - Amount of revenues generated per dollar of assets; measures the efficiency of a company's use of its assets in generating salves revenue - A ratio of 2.5 means that for every dollar of assets created, revenue will increase by $2.50 Gross Margin Gross Profit / Revenue - Indicates how efficiently labor and supplies are used in the production process