Summary Wall Street Prep Accounting Exam 2024 with complete solutions

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Wall Street Prep Accounting Exam 2023 with completesolutions

1.Liquidity Ratios: measures of a firm's short-term ability to meet

its current obligations

2.Profitability Ratios: measures of a firm's profitability relative to its

assets (op- erating efficiency) and to its revenue (operating

profitability)

3.Activity Ratios: Measure of efficiency of a firm's assets

4.Solvency Ratios: Measure of a firm's ability to pay its obligations

5.Inventory Turnover: COGS / avg inventory

6.Receivables Turnover: revenue / average accounts receivable

7.DSO (Days Sales Outstanding): AR/Credit Sales * days in

period days in period/receivables turnover

8.A/P turnover: COGS / Average A/P

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9.PPP (payables purchasing period): days in period/ Accounts payable

turnover

10.Current Ratio: current assets/current liabilities

11.Quick ratio (acid test): Cash and AR divided by current liabilities

12.Gross profit margin: gross profit/revenue

13.operating margin: operating profit/revenue

14.net profit margin: net income/revenue

15.asset turnover: revenue/ average assets

16.return on assets (ROA): Net Income / Average Assets

17.return on equity (ROE): net income/ total equity

18.Basic EPS: (Net Income - Preferred Dividends)/(Weighted Average

of Shares Outstanding)

19.Diluted EPS: diluted net income / weighted average diluted shares

outstanding

20.dividend yield: dividends/net income

21.debt to EBITDA: Total Debt/EBITDA

22.interest coverage ratio: EBIT/ interest expense

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23.fixed charge coverage: (EBIT + Lease charges)/(Interest Payments +

Lease charges)

24.Debt to Total Assets: Total Debt/Total Assets

25.debt to equity: total liabilities/total equity

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26.cash from operations (CFO): uses net income as a starting point

and con- verts accrual base net income into cash flow from

operations via a series of adjustments

27.cash from investing activities (CFI): capital expenditures / asset

sales and purchases

28.cash from financing activities (CFF): new borrowing / pay down of

debt / new issuance of stock / share repurchases / issuance of

dividends

29.working capital: -CFO

-increase in current assets = cash outflow

-increase in current liabilities = cash inflow

30.asset write downs / impairments: -added back to CFS via CFO

31.Increases in A/R, inventory, prepaid expenses, other current

assets should be net income to get to CFO: subtracted

32.increases in A/P, accrued expenses, other current liabilities should be

 net income to get to CFO: added

33.gains on sale of assets: subtracted from CFO