WGU C214 WGU Exam Cram 2023- Answered

Pt - ANSWER-is the sold price Pt-1 - ANSWER-is the bought price CFt - ANSWER-is the cash flow (coupons for bonds; dividends for stocks). Dollar Returns - ANSWER-= Pt - Pt-1 + CFt Cash Flow from Investing (CFI) - ANSWER-= Change in Net PP&E + Depreciation Expense Net PP&E - ANSWER-= Gross PP&E - Accumulated Depreciation With the assumption of no asset disposals, CFI will be equal to - ANSWER-1) change in Gross PP&E or 2) Change in Net PP&E plus depreciation expense. Dividends - ANSWER-= (Old RE + Net Income) - New RE Change in RE - ANSWER-= NI -dividends CFF - ANSWER-= change in notes payable + change in long-term debt - dividends (assuming no other relevant changes) FCFF - ANSWER-= EBIT (1-tax rate) + Depreciation - CAPEX - Increases in NWC EBIT - ANSWER-= Earnings before interest and taxes CAPEX - ANSWER-= Capital expenditure on PP&E; frequently measured as CFI NWC - ANSWER-= Net working capital (current assets - current liabilities) changes FCFE - ANSWER-= NI + Depreciation - CAPEX - Increases in NWC + Increases in Debt TAT Total Asset Turnover = Sales / Total Assets: - ANSWER-Literally, this ratio measures how many dollars in sales the firm generates per dollar of assets. TAT of three indicates that for - ANSWER-every $1 of assets, the firm is generating $3 in sales. TIE The Times Interest Earned Ratio = EBIT / Interest Expense: - ANSWER-Operating expense/Interest Expense