Series 79 || with Accurate Answers 100%.
Invested Capital correct answers Average Equity + Average Net Debt
Return on Assets (ROA) correct answers Net Income / Average Assets
Return on Equity (ROE) correct answers Net Income / Average Stockholders' Equity
Return on Invested Capital (ROIC) correct answers Adj. EBIT / Invested Capital
Or
EBIAT / Invested Capital
Return on Capital (ROC) correct answers Net Income / Invested Capital
Accounts Receivable Turnover correct answers Sales / Average Accounts Receivable
Days Sales Outstanding (DSO) correct answers (Average Accounts Receivable / Sales) × 365
Inventory Turnover correct answers COGS / Average Inventory
Days Inventory Held (DIH) correct answers (Average Inventory / COGS) × 365
Accounts Payable Turnover correct answers COGS / Average Accounts Payable
Days Payable Outstanding (DPO) correct answers (Average Accounts Payable / COGS) × 365
Equity Turnover correct answers Sales / Average Equity
Quick Ratio (Acid Test Ratio) correct answers (Current Assets - Inventory) / Currents Liabilities
Implied Enterprise Value correct answers Sales x (EV/Sales)
EBITDA x (EV/EBITDA)
EBIT x (EV/EBIT)
Implied Equity Value correct answers Net Income x P/E Multiple
Implied Stock Price correct answers EPS x P/E Multiple
Weighted Average Cost of Capital (WACC) correct answers (after tax cost of debt *
(debt/debt+equity)) + (cost of equity * (equity / (debt + equity))
Note:
*Use market val of equity if given*
*After tax cost of debt = cost of debt x (1- tax rate)
Cost of Debt correct answers Current Yield x (1 - Tax Rate)
, Cost of Equity (CAPM) correct answers Risk-Free Rate + (Levered Beta x Market Risk
Premium)
Market Risk Premium correct answers S&P 500 Expected Return - Risk Free Rate
Levered Beta correct answers unlevered beta * (1+[(1-tax rate)*(debt/equity)])
*Use market val of equity*
Unlevered Free Cash Flow correct answers EBIAT + D&A - CAPEX - Increase in Net Working
Capital
Implied Enterprise Value via Perpetuity Growth correct answers [FCF * (1+ growth rate)] /
(discount rate - growth rate)
*NOTE the exam will not always include the (1+g). If you try the calculation using (1+g) and
the result does not show up as an answer choice, eliminate the (1+g) and see if that result "fits."
Implied Enterprise Value via Dividend Discount Model correct answers [Annual Dividend * (1+
growth rate)] / (discount rate)
Economic Value Added (EVA) correct answers EBIAT - (Purchase Price * Discount)
Effective EBITDA Multiple correct answers (EBITDA x Purchase Multiple) / (EBITDA +
Synergies)
Maximum Purchase Price correct answers (EBITDA x Max Leverage Multiple) - current debt +
cash
Debt-to-Capitalization correct answers Total Debt / (Total Debt + Book Equity)
Price/Earnings (P/E) Ratio correct answers Stock Price/EPS
Equity Value / Net Income
Price-to-Earnings Growth (PEG) correct answers P/E Ratio / Annual EPS Growth
*NOTE* Enter Earnings growth percentage as is, EX) 7.5% = 7.5
Price-to-Book Value (P/B) correct answers Equity Value / Book Value of Equity
Stock Price / EPS
Price-to-Tangible Book Value correct answers Equity Value / (Book Value of Equity -
Goodwill)
Stock Price / Tangible Book Value per Share
Dividend Yield correct answers Annual Dividend / Stock Price
Total Annual Dividends / Net Income
Invested Capital correct answers Average Equity + Average Net Debt
Return on Assets (ROA) correct answers Net Income / Average Assets
Return on Equity (ROE) correct answers Net Income / Average Stockholders' Equity
Return on Invested Capital (ROIC) correct answers Adj. EBIT / Invested Capital
Or
EBIAT / Invested Capital
Return on Capital (ROC) correct answers Net Income / Invested Capital
Accounts Receivable Turnover correct answers Sales / Average Accounts Receivable
Days Sales Outstanding (DSO) correct answers (Average Accounts Receivable / Sales) × 365
Inventory Turnover correct answers COGS / Average Inventory
Days Inventory Held (DIH) correct answers (Average Inventory / COGS) × 365
Accounts Payable Turnover correct answers COGS / Average Accounts Payable
Days Payable Outstanding (DPO) correct answers (Average Accounts Payable / COGS) × 365
Equity Turnover correct answers Sales / Average Equity
Quick Ratio (Acid Test Ratio) correct answers (Current Assets - Inventory) / Currents Liabilities
Implied Enterprise Value correct answers Sales x (EV/Sales)
EBITDA x (EV/EBITDA)
EBIT x (EV/EBIT)
Implied Equity Value correct answers Net Income x P/E Multiple
Implied Stock Price correct answers EPS x P/E Multiple
Weighted Average Cost of Capital (WACC) correct answers (after tax cost of debt *
(debt/debt+equity)) + (cost of equity * (equity / (debt + equity))
Note:
*Use market val of equity if given*
*After tax cost of debt = cost of debt x (1- tax rate)
Cost of Debt correct answers Current Yield x (1 - Tax Rate)
, Cost of Equity (CAPM) correct answers Risk-Free Rate + (Levered Beta x Market Risk
Premium)
Market Risk Premium correct answers S&P 500 Expected Return - Risk Free Rate
Levered Beta correct answers unlevered beta * (1+[(1-tax rate)*(debt/equity)])
*Use market val of equity*
Unlevered Free Cash Flow correct answers EBIAT + D&A - CAPEX - Increase in Net Working
Capital
Implied Enterprise Value via Perpetuity Growth correct answers [FCF * (1+ growth rate)] /
(discount rate - growth rate)
*NOTE the exam will not always include the (1+g). If you try the calculation using (1+g) and
the result does not show up as an answer choice, eliminate the (1+g) and see if that result "fits."
Implied Enterprise Value via Dividend Discount Model correct answers [Annual Dividend * (1+
growth rate)] / (discount rate)
Economic Value Added (EVA) correct answers EBIAT - (Purchase Price * Discount)
Effective EBITDA Multiple correct answers (EBITDA x Purchase Multiple) / (EBITDA +
Synergies)
Maximum Purchase Price correct answers (EBITDA x Max Leverage Multiple) - current debt +
cash
Debt-to-Capitalization correct answers Total Debt / (Total Debt + Book Equity)
Price/Earnings (P/E) Ratio correct answers Stock Price/EPS
Equity Value / Net Income
Price-to-Earnings Growth (PEG) correct answers P/E Ratio / Annual EPS Growth
*NOTE* Enter Earnings growth percentage as is, EX) 7.5% = 7.5
Price-to-Book Value (P/B) correct answers Equity Value / Book Value of Equity
Stock Price / EPS
Price-to-Tangible Book Value correct answers Equity Value / (Book Value of Equity -
Goodwill)
Stock Price / Tangible Book Value per Share
Dividend Yield correct answers Annual Dividend / Stock Price
Total Annual Dividends / Net Income
