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ACCT 447 - Exam 2
Second Exam
21
Management
Undergraduate 4
10/16/2009

Additional Management Flashcards

 


 

Cards

Term
none
Definition
tax rate on p stock
Term
net profit margin X asset turnover
Definition
ROA =
Term
high, low
Definition
cost leaders should have __ asset turnover and __ profit margins (ROA)
Term
high
Definition
a firm trying to differentiate its product should have a __ profit margin (ROA)
Term
low
Definition
capital intensive firms have __ asset turnovers (ROA)
Term
non-cash
Definition
depreciation and amortization are __ expenses, but are still real costs since firms must reinvest
Term
capital (financial) leverage
Definition
portion of a firms assets financed with debt. involves contractual interest and principal obligations. high leverage means more risk and more interest expense
Term
fixed costs / variable costs
Definition
operating leverage =
Term
operating leverage
Definition
__ is a measure of how revenue growth translates into growth in operating income. It is a measure of leverage, and of how risky (volatile) a company's operating income is
Term
fixed costs / variable costs
Definition
operating leverage =
Term
ROA
Definition
higher operating leverage means greater variability in __. High FC: as sales increase, costs don't increase proportionally (economies of scale). as sales decrease, earnings drop more.
Term
economic conditions; computers/autos/industrial equip.; food/some clothing
Definition
Sales of certain goods are sensitive to __, such as __. __ are not as sensitive.
Term
gross profit %
Definition
companies with good LT economics have higher __ than those that don't
Term
<20%
Definition
gross profit % of __ usually indicates a competitive industry
Term
high, low, high
Definition
Electric company has: __ debt, __ ATO, and __ Profit Margin
Term
high
Definition
a retail has __ ATO
Term
DO IT BITCH
Definition
see physical cards for all ratios
Term
sustainable operating profits
Definition
a company's __ are found by removing nonoperating or nonrecurring items from reported earnings
Term
after-tax interest expense
Definition
__ is eliminated from the profit calculation so that operating profitability comparisons over time are not clouded by differences in financial structure
Term
liquidity
Definition
__ is the company's ST ability to generate cash for working capital needs and immediate debt repayment needs
Term
solvency
Definition
__ refers to the LT ability to generate cash internally or from external sources in order to satisfy plant capacity needs, fuel growth, and repay debt when due
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