M&A class - 9th september

Balance sheet
- Asset that can be converted to money within 12 months = currents asset (have to convert it within a year)
- Asset that can be converted to money more than 1 year = fixed asset

Liability = Money you borrowed.
- When you pay it back in less than a year = current liabilities (have to pay back within a year)
- When you pay it back in more than a year = long-term debt

Bond = emprunt, obligation, bon.
Equity = common stock = capital

Income statement
Sales
- cost of goods sold - expenses - depreciation expenses
= EBIT or Operating Income - taxes
= Net Income

Net Income = dividends + retained earnings
NI/NI =1
1 = dividends payant ration + retention ratio

M&A class - 15th september

I) Short Term Solvency Ratio (3 items)
1) CR = CA/CL
2) Quick ratio : (CA - inventory)/CL
3) Cash ratio = Cash/CL

II) Long term Solvency Ratio (5 items)
Total Debt Ratio = Total Debt/TA
Debt Ratio (debt to equality ratio) = TD/Total Equity
Equity multiplier = Total Asset/Total Equity = (TD+TE)/TE = 1+(TD/TE) = 1+Debt ratio
ICR = EBIT/Interest
Cash Covery(?) Ratio = (EBIT+depreciation)/Interest

III) Turn over ratio
Inventory turn over ratio (COGS)
AND Day Sales in Inventory = 365/Inv TOR
Account receivable TOR = Sales/(AR)
AND Day Sales in A/R = 365/(A/R TOR)
Total Asset Over Ratio = Sales/TA

IV) Probability Ratio
Profit margin = Net Income/Sales
Return On Asset = NI/TA
Return On Equity = NI/TE

V) Market Value Ratio
PER = Stock price per share/Earnings per Share
AND EPS = NI/shares outstanding
Market to Book Ratio = Stock Price per Share/(TE/# of shares)

The Du Pont Analysis
ROE = NI/TE = (NI/sales)*(sales/TA)*(TA/TE) = {Profit margin * TOR} * EM(=1+Debt/Equity) = {ROA} * (1+Debt/Equity)

VI)
I- IGR (Internal Growth Ratio)
= (ROA+b)/(1-ROBA*b) b is the earnings retention