Home > Preview
The flashcards below were created by user
on FreezingBlue Flashcards.
Cost of Captial
minimum acceptable rate of return on capital investment
Economic Value Added - Profit after deducting all costs, including the cost of capital
AKA as residual income
sum of long-term debt and shareholders' equity
after tax-operating income - (cost of capital) x total capitalization = EVA
This is what company would earn if it had no debt and could not take interest as a tax-deductible expense.
Return on Capital (ROC)
- after-tax operating income
- total capitalization
percentage; after-tax operating income as a percentage of long-term capital
Alaynas definition of liquidity
Principle is not risked. Are able to recoup the principle balance.
Net Working Captial
current assets-current liabilities
DuPont System: ROA
- Net Income + Interest
- Sales x Net Income + Interest
- Assets sales
- (asset (operating profit
- turnover) margin)
The Dupont System: ROE (return on equity)
What would you like to do?
Home > Flashcards > Print Preview