!!!

На мидтерме НЕ БУДЕТ вопросов построить финансовую отчетность (BS, IS, St of owner’s equity, cash
flow statement)

!!! Но будут вопросы по теории и задачи по финансовой отчетности (BS, IS, St of owner’s equity, cash
flow statement)

Midterm exam will cover the following topics.

1) calculate indirect method cash flow from operating activities from Net Income and adjustments:
increase/decrease in NWC (AR, AP, Inventory), Depreciation expense, etc

2) why cash is NOT net income? 3 reasons

3) net working capital (NWC)?

4) Financial ratios:

o Short-term solvency, or liquidity, ratios:

 Current ratio calculation – is it good or bad, explain

• Long-term solvency, or financial leverage, ratios:

 Debt to equity ratio calculation – is it good or bad, explain

 Cash coverage ratio calculation – is it good or bad, explain
o Profitability ratios:
 Return on equity calculation – is it good or bad, explain

o Asset management, or turnover, ratios:

 Days inventory outstanding – is it good or bad, explain

 Days sales (AR) outstanding calculation (DSO) – is it good or bad, explain

 Days payables outstanding (DPO)– is it good or bad, explain

o Cash conversion cycle (кассовый разрыв) in days –is it good or bad, explain

!!! Cash conversion cycle (кассовый разрыв) calculation and exercise: https://agicap.com/en/article/cash-
conversion-cycle/

The cash conversion cycle, also known as the cash flow cycle, is a measure of the
time taken to convert a company’s investments in inventory into cash. In other
words, a cash cycle starts when a firm purchases inventory and ends when it
receives cash payments from its sales. It is expressed in terms of the number of
days.
5) From Net income to EBIT calculation

6) Apply the percentage of sales method (chapter 4: Long-term financial planning and growth)

7) Compute the external financing needed to fund a firm’s growth (chapter 4: Long-term financial planning
and growth)

8) Statement of cash flows:

• Operating activities:

• Investment activities

• Financing activities

9) what is Standardized Financial Statements?

10) Calculation and theory: financial statements: Balance sheet, Income statement, statement of owners
equity, cash flow statement

11) costs: production and non production, variable and fixed