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What Working Capital Means in Valuation and Financial Modeling
 
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Why Does Working Capital Matter? Many places define it as Current Assets minus Current Liabilities - that is technically true, but it misses something important. By http://breakingintowallstreet.com/biws/ WHY does it matter? What is the point of this? How do you use it? How does it impact a company's value? It's really the CHANGE in Working Capital that matters for valuation and financial modeling purposes. Working Capital, by itself, does not tell you a terrible amount and could mean many different things... but when you also look at the CHANGE in WC, what it is as a % of revenue and other metrics, AND the company's business model, that's when you start gaining insights. What Does the "Change" in Working Capital Mean? Best NOT to use the official definition of Current Assets minus Current Liabilities... First off, cash and debt should be excluded altogether because they are not operational line items and therefore won't factor in when calculating a company's Free Cash Flow in any type of valuation. Also, it's easier to think of this in terms of the *individual items* that comprise these Current, "Operating" Assets and Liabilities. Most Common Current, Operating Assets: Accounts Receivable, Inventory, and Prepaid Expenses. Commonality: Paid for them upfront in cash or represent cash payments you're waiting on. INCREASING these will cost you cash! Most Common Current, Operating Liabilities: Deferred Revenue, Accounts Payable, and Accrued Liabilities. Commonality: You get cash from these! When they increase, your cash flow goes up because you're getting cash in advance (Deferred Revenue) or because you're delaying payments (AP and AL). So with the "Change" in Working Capital, you're seeing which group of items increases by a greater amount: Current Assets Excluding Cash? or Current Liabilities Excluding Debt? If this Change is NEGATIVE, then Current Assets are increasing by MORE than Current Liabilities! Interpretation: Company might be spending a lot on Inventory, might be waiting too long for customer payments, might be paying suppliers very quickly... If this Change is POSITIVE, then Current Liabilities are increasing by more than Current Assets! Interpretation: Could be collecting a lot of cash upfront, might have no or minimal inventory, or might just be delaying payments to suppliers. Examples and Real World Interpretations: Wal-Mart's Change in Working Capital: It's always negative due to huge Inventory expenditures - since WMT is an offline retailer, it MUST pay for Inventory in advance before selling it. It does keep suppliers waiting a fair amount since its AP balance is also high and increasing each year, but Inventory spending outweighs that. This means that as Wal-Mart's business grows, it requires ADDITIONAL cash to keep growing! But as a % of revenue, this is very small so it makes a minimal impact. It will reduce the company's valuation in a DCF, though, because this will push down Free Cash Flow. Amazon's Change in Working Capital: Amazon's Change in WC, by contrast is positive each year. It's still spending a lot on inventory... and actually, as a % of revenue the change is higher than Wal-Mart's each year... BUT it is also not paying suppliers as quickly and is accruing more to the Accounts Payable balance each year. For WMT, the increase in Inventory exceeds the increase in AP every year... for Amazon it's the opposite! Plus, the Deferred Revenue from customers paying in cash in advance for products boosts Amazon's cash flow. The end result: for Amazon, the Change in Working Capital boosts its Free Cash Flow and therefore its valuation in a DCF - quite significantly since it exceeds Net Income. Salesforce's Change in Working Capital: Salesforce also has a positive Change in Working Capital... No inventory required since it's a subscription software company! BUT it still has AR, and Deferred Commissions - must be paid upfront to sales reps in cash and then recognized over term of subscription. The Net Change still ends up being positive, though, thanks to that huge increase in Deferred Revenue each year... subscriptions are often sold months or years in advance, but the cash is collected UPFRONT. So as Salesforce grows, it doesn't require additional cash - it actually GENERATES additional cash. This will increase its Free Cash Flow and therefore increase its valuation in a DCF. Summary - What Does the Change in Working Capital Mean? As the business grows, does it generate MORE cash than you expect... or it does it REQUIRE additional cash to grow? Makes a big difference for a DCF analysis when you value a company based on its cash flows, but also makes a difference for how much funding the business needs to grow, and even what happens when that business gets acquired. Further Resources http://youtube.breakingintowallstreet.com.s3.amazonaws.com/107-04-WMT-AMZN-CRM-Working-Capital.xlsx
Capital Expenditures vs Operating Expenditures
 
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This video will first explain what capital expenditures and operating expenditures mean, talk about the difference between these two terms and then provide examples of capital expenditures and operating expenditures. CapEx is the short form for capital expenditures and OpEx is the short form for operating expenditures. Capital expenditures are when a company buys assets that add value to the business. Examples would be things like purchasing equipment, buying property and building a factory on it and many more. Operating expenditures is when businesses pay to maintain operations. Examples of operating expenditures would be paying employee wages, paying utility bills and much more. Operating expenditures are day to day expenses wheras capital expenditures are when companies spend money that will lead to future benefit. The capital expenditures number is used in the crucial metric called Free Cash Flow. Click here to watch our video on Free Cash Flow https://www.youtube.com/watch?v=2WlG6QwgHh0 The operating expenditures figure is used in the net income figure. Net Income = Revenue - Expenses and since operating expenditures (otherwise known as operating expenses) is a type of regular expense, it is factored in this calculating and falls under expenses. There are many numbers that contribute to expenses and operating expenses is one of these numbers. Make sure to Like, Comment, Subscribe and Share! Ending beat by Lynval D'tchalis, check him out here: https://soundcloud.com/lynval-sundayswag-dtchalis If you want to know more about us or the progress of our videos, please follow us @MrSoniBros and @MrNikkyG
Views: 54941 Soni Bros
CapEx vs OpEx explanation
 
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CapEx versus OpEx. Capital Expenditures versus Operating Expenditures. There is a finance and accounting aspect to the terms CapEx and Opex, as well as a business model aspect. Let’s discuss both, and walk through some examples of how the terms CapEx and OpEx are used. CapEx is Capital Expenditures. OpEx is Operating Expenditures. What these terms have in common is the word expenditures, you are spending money, but in different ways. Capital Expenditures. As a working definition of CapEx, this is money spent by a business or organization to acquire or upgrade fixed assets, such as buildings, machines and equipment. Operating Expenditures. If CapEx is the upfront investment to buy a fixed asset, then a working definition of OpEx is the ongoing spending to keep the fixed asset running. For an expenditure to be considered as CapEx, you have to own an asset. There is a threshold level for expenditures to qualify as CapEx: there must be a useful life of more than one year, and the asset value must be more than a minimum amount. I have worked with a company where this minimum was $2500, and others where it was $7000. Please check with the finance department of your company on what your minimum level is. How about that part of maintenance where you are improving the performance of a machine and increase its capacity? What about software developed for internal use? What about the development phase of R&D? You could argue in all three cases that future economic benefits are generated by these projects, and according to the matching principle in finance it would be appropriate to capitalize these costs, and subsequently depreciate or amortize these assets over their useful life. Each of these cases will have to be evaluated carefully against current US GAAP or IFRS rules (depending on where your company is listed), and you will have to meet very strict criteria to apply a CapEx treatment. How does CapEx affect the financial statements? Let’s take a look at the balance sheet, the income statement and the cash flow statement, when we answer the question “does this expenditure qualify for CapEx (it meets the capitalization criteria) or it does not qualify as CapEx?”. First of all, the CapEx spend is a cash outflow recorded in “Cash From Investing Activities”. On the balance sheet, it gets accounted for as an asset, in the Plant and Equipment category. Over the years of its useful life, the asset gets depreciated, and the depreciation charge hits the income statement or P&L in each of the years of the assets’ economic life. I will link to my video about deprecation if you are interested in learning how that works: https://www.youtube.com/watch?v=6SY8s1_OEro Do you go for the upfront CapEx investment to own servers for your datacenter, where you are unsure how much capacity you will actually need, or do you pay a monthly OpEx fee for an external cloud service where it’s pretty much “pay as you go” and “spend what you use”? I can’t give you a “one size fits all” answer to this question, it’s really something that an IT manager and a finance manager should analyze together. Risk and scale should be part of this conversation. The evaluation is a variation of the age-old “own versus use”, “buy versus rent”, “buy versus lease” discussion, which is more relevant than ever before in these days of ubiquitous digital devices and tools, disruption of mobility models through Uber and others, and disruption of the travel and leisure models through Airbnb. This video discusses the impact of CapEx versus OpEx on the balance sheet, income statement, and cash flow statement, as well as ratios such as ROA. For more information on ROA and DuPont analysis, watch https://www.youtube.com/watch?v=bhbDDSohJ84 Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!
Working Capital Video Definition
 
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We explain the definition of Working Capital, provide a clear example of the formula and explain why it's an important concept in business, finance & investing.
Views: 129368 sainvestinganswers
Business Activities: Operating, Investing and Financing (Financial Accounting Tutorial #4)
 
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75% OFF the Full Crash Course on Udemy: http://bit.ly/2oZIdcP In this tutorial we discuss the various business activities a company encounters on a day to day basis. The activities of any company can be sorted into either operating, investing or financing activities. Operating normally has to do with current assets/current liabilities or working capital along with expenses and revenues. Investing activities involve long term or non-current assets like the purchase and sale of capital assets like property or investments (some examples). Financing activities involve non-current liabilities and equity accounts. The issuance of more shares to raise cash or the issuance of a dividend or repayment of bonds are all prime examples. Watch the video to get a basic idea as to how business activities are split into these three sections! Leave a comment or question if you have any trouble understanding the concept! ** NotePirate is privately owned and exclusive to NotePirate.com** Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: http://twitter.com/notepirate
Views: 26175 Notepirate
Operating Working Capital
 
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In class we discuss Working Capital vs. Operating Working Capital. We model out and project Operating Working Capital for WalMart.
Views: 834 Paul Pignataro
Leveraged Finance
 
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Leveraged finance means using large amounts of borrowed money to buy something. Probably the most common use of leveraged finance is when a private equity firm uses it to buy another company. This short video explains how it all works.
Views: 35183 paddy hirsch
Capital Budgeting Lecture in 10 min., Capital Budgeting Techniques Decisions NPV Net Present Value
 
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Clicked here http://www.MBAbullshit.com/ and OMG wow! I'm SHOCKED how easy.. No wonder others goin crazy sharing this??? Share it with your other friends too! http://www.youtube.com/watch?v=QRh0tiG2lVk Fun MBAbullshit.com is filled with easy quick video tutorial reviews on topics for MBA, BBA, and business college students on lots of topics from Finance or Financial Management, Quantitative Analysis, Managerial Economics, Strategic Management, Accounting, and many others. Cut through the bullshit to understand MBA!(Coming soon!)
Views: 233266 MBAbullshitDotCom
Operating and Cash Cycles | Business Finance (FINC101)
 
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http://goo.gl/v7wELP for more free video tutorials covering Business Finance. The objective of this video is to give an overview on operating cycles and cash cycles. Operating cycle can be defined as the length of time between purchasing inventory & receiving cash from sales. On the contrary, the cash cycle is the length of time between paying for the inventory and receiving cash from sales. Moving on, the video explains all the components of operating & cash cycle as well as discusses inventory period, AP period and AR period in greater details. Next, the video shows the calculation of turnover- the number of time a year that the average amount of inventory, receivables or payables are sold, recovered or paid. The video introduces inventory turnover which is the number of times a year that average inventory is sold. Later, it also discusses about the account receivable turnover and account payable turnover subsequent to an appropriate example where it shows all calculations simultaneously.
Views: 14893 Spoon Feed Me
Free Cash Flow: How to Interpret It and Use It In a Valuation
 
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You'll learn what "Free Cash Flow" (FCF) means, why it's such an important metric when analyzing and valuing companies. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn how to interpret positive vs. negative FCF, and what different numbers over time mean -- using a comparison between Wal-Mart, Amazon, and Salesforce as our example. Table of Contents: 0:54 What Free Cash Flow (FCF) is and Why It's Important 2:26 What Positive FCF Tells You, and What to Do With It 3:56 What Negative FCF Tells You, and What to Do With It 4:38 Why You Exclude Most Investing and Financing Activities in the FCF Calculation 7:55 How to Use and Interpret FCF When Analyzing Companies 11:58 Wal-Mart vs. Amazon vs. Salesforce: Free Cash Flow Across Sectors 19:33 Recap and Summary What is Free Cash Flow? Normally it's defined as Cash Flow from Operations minus Capital Expenditures. Tells you the company's DISCRETIONARY cash flow - after paying for expenses and working capital requirements like inventory and capital expenditures, how much cash flow can it put to use for other purposes? If the company generates a lot of Free Cash Flow, it has many options: hire more employees, spend more on working capital, invest in CapEx, invest in other securities, repay debt, issue dividends or repurchase shares, or even acquire other companies. If FCF is negative, you need to dig in and see if it's a one-time issue or recurring problem, and then figure out why: Are sales declining? Are expenses too high? Is the company spending too much on CapEx? If FCF is consistently negative, the company might have to raise debt or equity eventually, or it might have to restructure itself or cut costs in some other way. Why Do You Exclude Most Investing and Financing Activities Other Than CapEx? Because all other activities are, for the most part, "optional" and non-recurring. A normal company does not NEED to buy stocks or issue dividends or repurchase shares... those are all optional uses of cash. All it NEEDS to do to keep its business running is sell products to customers, pay for expenses, and keep investing in longer-term assets such as buildings and equipment (PP&E). Debt repayment and interest expense are "borderline" because some variations of Free Cash Flow will include them, others will exclude them, and some will include interest expense but not debt principal repayment. How Do You Use Free Cash Flow? It's used in a DCF (or at least, a variation of it) to value a company; it's also used in a leveraged buyout (LBO) model to determine how much debt a company can repay. And you can calculate it on a standalone basis for use when comparing different companies. The key is to DIG IN and see why Free Cash Flow is changing the way it is - Organic sales growth? Artificial cost-cutting? Accounting gimmicks? Different working capital policies? IDEALLY, FCF will be increasing because of higher units sales and/or higher market share, and/or higher margins due to economies of scale. Less Good: FCF is growing due to cost-cutting, CapEx slashing, or FCF is growing in spite of falling sales and profits... because of a company playing games with Working Capital, non-core activities, or CapEx spending. Wal-Mart vs. Amazon vs. Salesforce Comparison Main takeaway here is that Wal-Mart's FCF is all over the place, but Cash Flow from Operations is MOSTLY growing, so that appears to be driven by the also growing organic sales. The company is doing some odd things with CapEx and Working Capital, which led to fluctuations in FCF - not exactly "bad" or "good," just neutral and requires more research. With Amazon, they've increased CapEx spending massively in the past 2 years so that has pushed down CapEx. CFO is growing, driven by organic revenue growth (no "games" with Working Capital), but it's very difficult to assess whether all that CapEx spending will pay off in the long-term. With Salesforce, FCF is definitely growing organically (Revenue growth leads directly to CFO growth, and CapEx varies a bit but not as much as with Amazon), but the company is also spending a ton on acquisitions... will it continue? If CapEx as a % of revenue stays low, it will most likely continue to spend on acquisitions - unlikely to issue dividends, repurchase shares, etc. since it's a growth company. Further Resources http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Free-Cash-Flow.xlsx http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Walmart-Financial-Statements.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Amazon-Financial-Statements.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-10-Salesforce-Financial-Statements.pdf
Operating Budget Components and Preparation
 
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Please like our Facebook page at https://www.facebook.com/rutgersweb To watch the entire video, please go to https://www.youtube.com/watch?v=eGCcK14V_C0 Description: The class begins with a brief recap of the previous lecture. Methods used to determine what investment to invest in are discussed (i.e. "Capital Investment Decisions"), such as NPV, IRR, and PI. After a few exercises are reviewed as well as the topics to be prepared for for the upcoming mid-term, the Professor moves on to cover chapter 22, which focuses on budgets (including why and how they are used). The steps to preparing an operating budget are also shown. To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Intro to Accounting for Operating Leases (New FASB Rules) | Intermediate Accounting | CPA Exam FAR
 
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Like us on Facebook: https://www.facebook.com/accountinglectures Visit the website where you can search using a specific term: http://www.farhatlectures.org/ Connect with LinkedIn: https://www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-2453423a/ A lease is a contractual agreement between a lessor and a lessee that gives the lessee the right to use specific property, owned by the lessor, for a specified period of time. In return for this right, the lessee agrees to make rental payments over the lease term to the lessor. 3. The lessors that own property include banks, captive leasing companies, and independents. Advantages of Leasing 4. In discussing the advantages of leasing arrangements, advocates point out that leasing allows for: (a) 100% financing at fixed rates, (b) protection against obsolescence, (c) flexibility, (d) less costly financing, (e) tax advantages, and (f) off-balance-sheet financing. 5. A variety of opinions exist regarding the manner in which certain long-term lease arrange¬ments should be accounted for. These opinions range from total capitalization of all long-term leases to the belief that leases represent executory contracts that should not be capitalized. The FASB requires capitalization of lease arrangements that are similar to installment purchases. In short, lease arrangements that transfer substantially all of the risks and rewards of ownership of property should be capitalized by the lessee. Lessee Accounting - Capitalization Criteria 6. (L.O. 2) For accounting purposes of the lessee, all leases may be classified as operating leases or capital leases. For a lease to be recorded as a capital lease, the lease must be noncancelable and meet one of the following four criteria: a. The lease transfers ownership of the property to the lessee at the end of the lease. b. The lease contains a bargain-purchase option. c. The lease term is equal to 75% or more of the estimated economic life of the leased property. d. The present value of the minimum lease payments (excluding executory costs) equals or exceeds 90% of the fair value of the leased property. If the lease meets none of the four criteria, the lease should be classified and accounted for as an operating lease. 7. A bargain purchase option is a provision allowing the lessee to purchase the leased property for a price that is significantly lower than the property’s expected fair value at the date the purchase option becomes exercisable. The 75% of economic life test is based on the belief that when a lease period equals or exceeds 75% of the asset’s economic life, the risks and rewards of ownership are transferred to the lessee and capitalization is appropriate. The reason for the recovery of investment test (90%) is that if the present value of the minimum lease payments are reasonably close to the market price of the asset, the asset is effectively being purchased. A major exception to the 75% and 90% rules is when the inception of the lease occurs during the last 25% of the asset’s life. When this occurs the 75% and 90% tests should not be used. Capital Leases for Lessees 8. Under the capital lease method, the lessee treats the lease transaction as if an asset is being purchased over time (installment basis). For a capital lease, the lessee records an asset and a liability at the lower of (a) the present value of the minimum lease payments during the term of the lease or (b) the fair value of the leased asset at the inception of the lease. In determining the present value of the minimum lease payments, three important concepts are involved: (a) minimum lease payments, (b) executory costs, and (c) the discount rate. 9. Minimum lease payments include (a) minimum rental payments, (b) any guaranteed residual value, (c) penalty for failure to renew or extend the lease, and (d) any bargain- purchase option. Minimum rental payments are the minimum payments the lessee is obligated to make to the lessor under the lease agreement. A residual value is the estimated fair value of the leased property at the end of the lease term. The guaranteed residual value is (a) the certain or determinable amount at which the lessor has the right to require the lessee to purchase the asset, or (b) the amount the lessee or the third-party guarantor guarantees the lessor will realize. This allows the lessor to transfer the risk of loss in the fair value of the asset to the lessee. 10. If the lessee guarantees the residual value, the present value of this residual value should be reported as part of the lease liability. If a bargain purchase option exists instead of a guaranteed residual value, the lessee should increase the present value of the minimum lease payments by the present value of the option price. In both the guaranteed residual value and the bargain purchase option cases, the lessee is committed to making these payments, and therefore the payments should be reported as an increase to the lease
Weighted Average Cost of Capital (WACC)
 
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This video explains the concept of WACC (the Weighted Average Cost of Capital). An example is provided to demonstrate how to calculate WACC. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 318728 Edspira
MaFIA Tutorial: Working capital, net working capital, and net operating working capital
 
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Understanding the relationship between working capital, net working capital, and net operating working capital
Views: 118 Academics MaFIA
CFA level I - Working capital Management- Part I
 
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We offer the most comprehensive and easy to understand video lectures for CFA and FRM Programs. To know more about our video lecture series, visit us at www.fintreeindia.com This Video lecture was recorded by Mr. Utkarsh Jain, during his live CFA Level I Classes in Pune (India). This video lecture covers following key area's: 1) Primary and secondary sources of liquidity and factors that influence a company's liquidity position. 2) A company's liquidity measures with those of peer companies. 3) working capital effectiveness of a company based on its operating and cash conversion cycles, and compare the company's effectiveness with that of peer companies. 4)How different types of cash flows affect a company's net daily cash position. 5)Comparable yields on various securities, compare portfolio returns against a standard benchmark, and evaluate a company's short-term investment policy guidelines. 6) a company's management of accounts receivable, inventory, and accounts payable over time and compared to peer companies. 7) The choices of short-term funding available to a company and recommend a financing method.
Views: 54110 FinTree
Operating Capital-Working Capital-Line Of Credit-Credit Line
 
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http://biz-cashnow.askjakefor.info Get business working capital Short on operating capital. No up-front fees. Use for inventory, supplies, equipment, payroll, etc. Get funds in 24-48 hours.
Views: 174 jakespass
Working Capital Management - Financial Management - Shivansh Sharma
 
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Working Capital Management -Part 1( Estimation ) Language - Hindi Lecture By - Shivansh Sharma Suitable for - CA IPCC, CS Final CMA/CWA Inter, MBA Finance,Bcom, Bcom(H) Donate here: https://www.instamojo.com/@ShivanshSharma Follow on Social media Website http://www.shivanshsharma.in Facebook http://www.facebook.com/CACMAclasses Twitter http://www.twitter.com/CAshivanSharma Extra tags Financial management operating cycle debtors receivable management treasury management cash management maximum permissible banking finance working capital management estimation of working capital Cost accounting financial accounting cost management management accounting advance financial management strategic financial management current assets current liabilities CA IPCC CMA CS MBA bcom CA syllabus May Nov 2017 2018 2019
Views: 130768 Shivansh Sharma
Finance vs. Operating Lease (Lessee's Perspective)
 
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This video shows how the accounting for a lease would be different if the lessee used a finance lease vs. an operating lease under the new lease rule. With either classification, the lessee would initially recognize a right-of-use asset and a liability for the lease payments. Each time a lease payment is made, the lease liability would decrease. The expenses recognized each period, however, are different depending on whether the lease is a finance lease or an operating lease. With a finance lease, the lessee will separately recognize interest expense and amortization expense each period, and the total of these two expenses will be higher in the early years of the lease and lower in the later years of the lease. With an operating lease, in contrast, the lessee just recognizes one expense account called lease expense each period for the amount of the lease payment. The lease expense is the same amount each period, and it accounts for both interest accrued on the lease liability and amortization. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 8601 Edspira
How to value a company using net assets - MoneyWeek Investment Tutorials
 
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Following on from his "3 ways to value a company" video, Tim introduces the first method called the 'net assets approach'. Along the way he explains how it works, how it helps investors, and also points out some of its pitfalls.
Views: 95837 MoneyWeek
How networks can save operating expenses (OpEx) and capital expenditures (CapEx)
 
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CommScope’s splice closure technology improves technician effectiveness. Learn more about how our closure portfolio speeds deployment.
Views: 192 CommScope
Profitability Ratios - Gross, Net, Operating Profit Margin in Hindi (2018)
 
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Profitability ratios - Gross Profit Margin, Net Profit Margin, Operating Profit Margin and Pre Tax Margin explained in hindi. They are also called as Gross Profit ratio, Net Profit ratio and Operating Profit ratio. These return on sales ratios. Similarly, we also have return on investment (ROI) ratios like return on assets (ROA), return on capital employed (ROCE) and Return on Equity (ROE). Related Videos: EBITDA, EBIT & Operating Profit: EBITDA, EBIT & Operating Profit Markup vs Profit Margin: https://youtu.be/ajUUn72pUAk Financial Ratios & Analysis: https://youtu.be/CZscpOND3Vs Return on Investment (ROI): https://youtu.be/ij7y5e2MVG4 Return on Equity (ROE): https://youtu.be/K-OhdUGqdzc ROCE (Return on Capital Employed): https://youtu.be/FjWuma0U2x0 Return on Assets: https://youtu.be/7z9jDKNub6U प्रोफिटेबिलिटी रेश्यो जैसे - ग्रॉस प्रॉफिट मार्जिन, नेट प्रॉफिट मार्जिन, ऑपरेटिंग प्रॉफिट मार्जिन और प्री टैक्स मार्जिन को इस वीडियो में हिंदी में एक्सप्लेन किया गया है। इनको ग्रॉस प्रॉफिट रेश्यो, नेट प्रॉफिट रेश्यो और ऑपरेटिंग प्रॉफिट रेश्यो के नाम से भी जाना जाता है। और रिटर्न ऑन सेल्स रेश्यो की ही तरह रिटर्न ऑन इन्वेस्टमेंट (ROI) रेश्यो जैसे रिटर्न ऑन एसेट्स (ROA), रिटर्न ऑन कैपिटल एम्प्लॉयड (ROCE) और रिटर्न ऑन इक्विटी (ROE) भी होते हैं। Share this Video: https://youtu.be/pHgiuO2ZYoU Subscribe To Our Channel and Get More Property and Real Estate Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What are the different profitability ratios? What is the gross profit margin? What is the net profit margin? What is the operating profit margin and pre-tax margin? What is the meaning of gross profit ratio, net profit ratio, and operating profit ratio? How to calculate gross profit margin, net profit margin, operating profit margin, and pre-tax margin? How profitability ratio calculation can help you make better investment decisions? How to do profitability ratio analysis of a company? How to calculate the profit margins of any company? What is the formula of gross profit margin calculation? What is the formula of operating profit margin calculation? How to calculate the pre-tax profit margin calculation? How is gross profit margin different from operating profit margin? How profitability ratio calculation helps you to compare companies before investing? Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Twitter - http://twitter.com/assetyogi Facebook – https://www.facebook.com/assetyogi Linkedin - http://www.linkedin.com/company/asset-yogi Google Plus – https://plus.google.com/+assetyogi-ay Instagram - http://instagram.com/assetyogi Pinterest - http://pinterest.com/assetyogi/ Hope you liked this video in Hindi on “Profitability Ratios - Gross, Net, Operating Profit Margin”.
Views: 9934 Asset Yogi
Funds Flow Statement #1 [ Schedule of Changes in Working Capital ] :-by kauserwise tutorial
 
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▓▓▓▓░░░░───CONTRIBUTION ───░░░▓▓▓▓ If you like this video and wish to support this kauserwise channel, please contribute via, * Paytm a/c : 7401428918 * Paypal a/c : www.paypal.me/kauserwisetutorial [Every contribution is helpful] Thanks & All the Best!!! ─────────────────────────── Funds flow statement with adjustment, comprehensive problem, funds from operation, out flow of cash, inflow of cash, sources of funds, application of funds, accounting tutorial. To watch more tutorials pls visit: www.youtube.com/c/kauserwise * Financial Accounts * Corporate accounts * Cost and Management accounts * Operations Research Playlists: For Financial accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnojfVAucCUHGmcAay_1ov46 For Cost and Management accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnpgUjlVR-znIRMFVF0A_aaA For Corporate accounting - https://www.youtube.com/playlist?list=PLabr9RWfBcnorJc6lonRWP4b39sZgUEhx For Operations Research - https://www.youtube.com/playlist?list=PLabr9RWfBcnoLyXr4Y7MzmHSu3bDjLvhu
Views: 296766 Kauser Wise
Investment Banking 101: Operating Model
 
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In this episode of the financial modelling series Sergey, ex-Goldman Sachs investment banker, will describe how to build an operating model for a start-up company with the step-by-step financial modelling guide. 00:47 income statement assumptions total revenue cost of goods sold research & development sales & marketing general & administrative expenses other expenses 26:00 balance sheet assumptions operating assets operating liabilities capex & depreciation schedule other assumptions 37:35 income statement revenue gross profit operating expenses operating income ( EBIT) prfoit before taxes net income 49:10 balance sheet assets liabilities & shareholders equity 01:04:08 cash flow statement cash flow from operating activities Original Excel file with financial model can be found here: https://goo.gl/QScJgJ Our Investment Banking preparation course https://youtu.be/bBMmN8Cmq3g WANT TO GET INTO INVESTMENT BANKING? Join Sergey's course on Investment Banking Interview Prep https://edu.fless.pro/investment-banking-interview-prep-course SUBSCRIBE AND STAY WITH US! FLESS https://fless.pro Instagram https://www.instagram.com/flesspro Facebook https://www.facebook.com/flesspro VK https://vk.com/flesspro Telegram https://t.me/flesspro
Views: 5337 Fless
Cash Flow from Operations (Statement of Cash Flows)
 
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This video demonstrates how to calculate Cash Flow from Operations (aka Operating Cash Flow) using the Indirect Method on the Statement of Cash Flows. The video uses a comprehensive example to show how Cash Flow from Operations is computed and explains how Cash Flow from Operations is different from Cash Flow from Investing and Cash Flow from Financing. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 88232 Edspira
Unlevered Free Cash Flow: What Goes in It, and Why It Matters
 
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In this revised tutorial, you’ll learn why Unlevered Free Cash Flow is important, the items you should include and exclude, and how to calculate it for real companies in different industries. You’ll also get answers to the most common questions we receive about this topic at the end. https://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 1:05 Why Unlevered Free Cash Flow Matters 2:09 Defining Unlevered FCF 3:51 Unlevered FCF for Steel Dynamics 12:08 Unlevered FCF for Snap 13:51 Common Questions and Answers About Unlevered FCF 18:32 Recap and Summary Resources: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-20-Unlevered-FCF-Slides.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-20-STLD-DCF.xlsx https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-20-STLD-FCF-from-Statements.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/107-20-SNAP-FCF-from-Statements.pdf Lesson Outline: A DCF is split into the Explicit Forecast Period (Part 1) and the Terminal Period (Part 2). You always start in Part 1 by projecting the company’s Cash Flows over 5-10 years, and sometimes more than that, and you almost always use Unlevered Free Cash Flow because it doesn’t depend on the company’s capital structure, it’s faster and easier, and it gets you the most consistent results. Unlevered Free Cash Flow should reflect only items that are: 1) Related to or “available” to all investor groups in the company – think of it as “Free Cash Flow to ALL Investors”; and 2) Recurring for the company’s core-business operations. Unlevered FCF corresponds to Enterprise Value, which represents the value of the company’s core-business Assets to ALL investors in the company. As a result, you ignore most items on the financial statements, and Unlevered FCF usually includes only: 1) Revenue 2) COGS and Operating Expenses 3) Taxes 4) Depreciation & Amortization (and sometimes other non-cash charges) 5) Change in Working Capital 6) Capital Expenditures You IGNORE Net Interest Expense, Other Income / (Expense), most non-cash adjustments, most of the CFI section, and the CFF section on the CFS. Example for Steel Dynamics: We include the common items above, and we ignore the Asset Impairment Charges (non-recurring), Net Interest Expense (only available to Debt investors), and Other Income / Expense (non-core-business activity). We include but modify the Income Tax Expense, and instead of Net Income on the CFS, we use NOPAT, equal to EBIT * (1 – Tax Rate), instead. On the Cash Flow Statement, we include the Depreciation & Amortization add-back, exclude Impairment Charges and Gains/Losses (non-recurring), and exclude Stock-Based Compensation (affects only the Equity investors, changes share count, and is not a real non-cash expense). We do include Deferred Income Taxes as well because a DCF should reflect the company’s actual Cash Taxes paid, but they decrease as a % of Income Taxes over time and should not be a major value driver for most companies. Then, we keep everything in Working Capital, we keep CapEx in Cash Flow from Investing but drop everything else, and we ignore everything in Cash Flow from Financing (items are non-recurring, or related to just Equity or just Debt investors). Example for Snap: It’s very similar; keep Revenue, Cost of Revenue, and all Operating Expenses, modify the Income Tax figure, use NOPAT rather than Net Income, and include D&A, Deferred Taxes, the Change in Working Capital, and CapEx. We might include the Purchases of Intangible Assets as well, depending on the company’s plans and how they’re contributing to the business.
How to Calculate Payback Period Formula in 6 min. (Basic) Tutorial Lesson Review
 
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Views: 308095 MBAbullshitDotCom
Working Capital Baltimore |443-961-2285| Business Loans Baltimore
 
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Working Capital Baltimore |443-961-2285| Business Loans Baltimore Definition of Working Capital: https://en.wikipedia.org/wiki/Working_capital You Tube Channel: https://www.youtube.com/channel/UCjUNsMmcgc5l6tOlzdEXBXA You Tube Video: https://youtu.be/1_8QrcQeaEU As a business owner, have you ever been frustrated applying for a credit line from your bank? As you know, there is much truth to the statement, "Banks will only lend you money if you prove to them that you don't need it in the first place"! The excessive strictness of banks, which I have been observing in my career for 35 years, has given rise to my industry of "Alternative Commercial Funding". Now don't get me wrong! We do not attempt to push water upstream. If your company is triple A perfect credit score, then you belong at the bank; But in my experience, Banks are turning down about 6 or 7 out of every 10 applications for commercial funding. Sure we charge a few points higher, but funding is about access and opportunity, not a point or 2 on an APR interest rate. I ask you; "What is the cost of lost opportunity"? What is your cost of not being able to fund a lucrative purchase order, due to the banks holding you for 60 days? We help you leverage your assets to gain working capital; for ex; your Purchase orders, accounts receivable, invoices, contracts, and equipment. We can handle slow credit, young in business, start ups, loss on the tax return, highly leveraged in debt, negative net worth, prior bankruptcy and more. Keep an open mind! Give us a try! We can eliminate your cash flow problems so you can make payroll, bid on larger contracts, pay your vendors and suppliers, and have some extra working capital. Call me personally, Dennis Gilbert at 443 961-2285. Other searches that helped find this video: working capital baltimore venture capital baltimore angel investors baltimore business loans baltimore net working capital baltimore venture capitalist baltimore investors baltimore working capital formula net working capital formula capital expenditure baltimore capital investment baltimore venture capital firms baltimore small business loans baltimore what is working capital baltimore business loan baltimore forecasting working capital baltimore working capital management best practices baltimore accounts receivable meaning baltimore computing working capital baltimore meaning of accounting baltimore where to find working capital baltimore how to calculate the working capital working capital accounting formula understanding working capital baltimore what is operating capital baltimore funding a small business baltimore balance sheet working capital working in accounts receivable cash accounts baltimore accounts receivable baltimore working capital cash flow baltimore working capital turnover ratio formula sba working capital loan baltimore looking for investors for business baltimore calculate operating working capital working capital requirement calculation meaning of working capital balance sheet meaning business loan bank investment in net working capital investors in business raising business capital inventory accounts balance sheet accounts receivable Working Capital Baltimore |443-961-2285| Business Loans Baltimore Definition of Working Capital: https://en.wikipedia.org/wiki/Working_capital You Tube Channel: https://www.youtube.com/channel/UCjUNsMmcgc5l6tOlzdEXBXA You Tube Video: https://youtu.be/1_8QrcQeaEU
Net Operating Income (NOI) in Real Estate
 
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Net Operating Income (NOI) calculation is explained in this video. NOI is an important metric to evaluate an investment property. Use the right Net Operating Income (NOI) formula and Cap Rate calculation to evaluate any real estate. Learn how to calculate NOI, the right way. Share this Video: https://youtu.be/IQO6MkulpyU Subscribe To Our Channel and Get More Property and Real Estate Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What is net operating income? What is the formula of net operating income? How to calculate net operating income? What all is comprised of gross operating income? What all is included and not included in operating expenses? How to calculate gross operating income? How to calculate operating expenses? Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Linkedin - http://www.linkedin.com/company/asset-yogi Facebook – https://www.facebook.com/assetyogi Twitter - http://twitter.com/assetyogi Google Plus – https://plus.google.com/+assetyogi-ay Instagram - http://instagram.com/assetyogi Pinterest - http://pinterest.com/assetyogi/ Hope you liked this video on "Net Operating Income".
Views: 436 Asset Yogi
What is the net operating working capital
 
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What is the net operating working capital - Find out more explanation for : 'What is the net operating working capital' only from this channel. Information Source: google
Views: 31 moibrad3b
The Dragons battle over a surprising investment - Dragons' Den
 
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SUBSCRIBE for more BBC highlights: https://bit.ly/2IXqEIn The Dragons get hands on with a gruesome anatomy dissection business where entrepreneur Sam Piri is hoping to shock them into an investment. Watch Dragons' Den on the BBC: https://bbc.in/2xJdQxC Dragons' Den | Series 16 Episode 1 | BBC #dragonsden
Views: 674429 BBC
Alternative Definitions of Operating Cash Flow| Corporate Finance| CPA Exam BEC|CMA Exam | Chp10 p 5
 
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In financial accounting, operating cash flow (OCF), cash flow provided by operations, cash flow from operating activities (CFO) or free cash flow from operations (FCFO), refers to the amount of cash a company generates from the revenues it brings in, excluding costs associated with long-term investment on capital items or investment in securities. The International Financial Reporting Standards defines operating cash flow as cash generated from operations less taxation and interest paid, investment income received and less dividends paid gives rise to operating cash flows. To calculate cash generated from operations, one must calculate cash generated from customers and cash paid to suppliers. The difference between the two reflects cash generated from operations.
30 Small Business Ideas with Low Investment & High PROFIT
 
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Introducing top 30 small business Ideas with low Investment & High Profit. Earn Part Time - How to Get Rich with Blogging - https://www.youtube.com/watch?v=Df2VUmGN6AM These 30 small business ideas specially dedicated to all indian business owners and small business entrepreneurs. If you are thinking to start your own business in 2017 or 2018 then, you can start with these 30 small business ideas. These business ideas are set as low investment and High profit. If you found any questions or issues for starting any business then, feel free to ask your questions in comment box. Thanks for watching 30 small business ideas with low investment and high profit.
Views: 1094922 Young Entrepreneurs Forum
What is Free Cash Flow?
 
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Free cash flow is possibly the most critical number you can look at as a Rule #1 investor, yet it's not a number that's found very easily. In this video, I discuss how you can calculate free cash flow using the company's cash flow statement. http://bit.ly/1Zh9T8h To sign-up for my Transformational Investing Webinar, click the link above. Think you have enough money saved for retirement? Learn more: http://bit.ly/1PTafj1 Don't forget to subscribe to my channel here: http://ow.ly/RNAnK _____________ For more great Rule #1 content and training: Podcast: http://bit.ly/1N3FZ07 Blog: http://bit.ly/1OXZcIn Facebook: https://www.facebook.com/rule1investing Twitter: https://twitter.com/Rule1_Investing Google+: +PhilTownRule1Investing Pinterest: https://www.pinterest.com/rule1investing/
Session 10: Objective 4 - Alternative Definitions of Operating Cash Flow (2016)
 
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The Finance Coach: Introduction to Corporate Finance with Greg Pierce Textbook: Fundamentals of Corporate Finance Ross, Westerfield, Jordan Chapter 10: Making Capital Investment Decisions Objective 4 - Key Concepts: OCF Bottom Up Approach Top Down Approach Tax Shield Approach Depreciation Tax Shield More Information at: http://thefincoach.com/
Views: 921 TheFinCoach
Calculation of Profitability Ratios-G.P.Ratio/N.P.Ratio/Operating Ratio/Operating profit ratio
 
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Calculation of Profitability Ratios- G.P.Ratio/N.P.Ratio/Operating Ratio/Operating profit ratio -By Jitender Kumar { M.Com. , M.Phil. , C.M.A.(Inter) , C.S.(Inter) , P.G.D.B.A. , P.G.D.F.M. , U.G.C.N.E.T. Qualified } This is a channel for Financial Accounting, Corporate Accounting, Cost Accounting, Management Accounting and Financial Management. If you have doubts in a particular topic, whatsapp me that topic on my number 8447451771 or write in the comment box. I will definitely try to make tutorial for that topic. Brief description about Mr. Jitender Kumar Mr. Jitender Kumar is a graduate in commerce from Delhi University. He holds M.Com. and M.Phil degrees from Madurai Kamaraj University. He has also obtained Post Graduate Diploma in Financial Management and Post Graduate Diploma in Business Administration from Annamalai University. He qualified Cost and Management Accounting (C.M.A.)(Inter) in his first attempt and obtained All India Rank 48. He also qualified C.S.(Executive) in his first attempt securing first division. He qualified U.G.C.N.E.T. IN June 2012 with an enormous total of 75% marks. Besides this, he holds many certifications from National Stock Exchange(N.S.E.). Since 2002, he has taught many hundreds students. For more videos log on to: https://www.youtube.com/c/JitenderKumar2020 1. What does a high operating ratio indicate? Ans. High operating ratio indicates higher operating cost of the business & thus lower operating profits are available to the firm. 2. A Ltd. and B Ltd. are two companies operating in the same field and having STR of 4 times and 5 times respectively. Which company is having a better STR? Ans. STR of B Ltd. is better than the STR of A Ltd. since higher STR indicates efficient performance i.e. stock is being converted into sales quickly. 3. Give any two ratios judging the efficiency of a concern. Ans. STR and DTR. 4. What do you understand by Accounting Ratio? Ans. Accounting Ratio may be defined as a mathematical expression of the relationship between two items or group of items shown in the Financial Statements. 5. State any two limitations of Ratio Analysis. Ans. (i) Qualitative factors are ignored. (ii) Price level changes are not reflected. 6. State the limitation of ratio analysis regarding qualitative aspect. Ans. As ratio are arithmetical expression, qualitative aspect cannot be presented through ratios. Therefore, in making decision with the help of ratio, almost care should be taken, as ratio is only one-sided approach to measure the efficiency of the business. 7. Name the ratios that indicate the liquidity of an enterprise. Ans. Current Ratio and Liquid Ratio. 8. What is the ideal Current Ratio and Quick Ratio? Ans. Ideal Current Ratio 2:1, Ideal Quick Ratio 1:1 9. How the solvency of a business is assessed by ‘Financial Statement Analysis’? Ans. Through solvency Ratios, the solvency of a business is assessed by ‘Financial Statement Analysis’. 10. What does a low Debtors’ Turnover Ratio indicate? Ans. It may be an indication of long credit period or slow realisation from debtors. 11. What does a low working Capital Turnover Ratio indicate? Ans. It is an indication of inefficiency of working capital management. 12. How the ‘Earning Capacity of a business’ is assessed by ‘Financial Statement Analysis’? Ans. On the basis of ‘Profitability Ratios’ earning capacity of a business is assessed. 13. What will be the Operating Profit Ratio, if Operating Ratio is 82.95%? Ans. Operating Profit Ratio = 100- Operating Ratio = 100- 82.59 = 17.41%. 14. The gross Profit Ratio of a company is 50%. State with reason whether the decrease in rent received by Rs.15,000 will increase, decrease or not change the ratio. Ans. Decrease in rent received by Rs.15,000 will not change the Gross Profit Ratio because rent received neither effects the gross profit nor the net sales. 15. X Ltd. has a Debt Equity Ratio at 3:1. According to the management, it should be maintained at 1:1. What are the two choices to do so? Ans. The two choices to maintain Debt Equity Ratio at 1:1 are- a) To increase the Equity b) To reduce the debt. 16. You are a Debenture holder of a reputed company. Mention any two ratios that you will compute to examine whether your decision was justified. Ans. (i) Debt Equity Ratio (ii) Interest Coverage Ratio. 17. What does a higher inventory turnover ratio indicates? Ans. A higher inventory turnover ratio indicates that finished inventory is rapidly turning into sales.
Views: 3411 Jitender Kumar
Session 10: Objective 4 - Alternative Definitions of Operating Cash Flow
 
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The Finance Coach: Introduction to Corporate Finance with Greg Pierce Textbook: Fundamentals of Corporate Finance Ross, Westerfield, Jordan Chapter 10: Making Capital Investment Decisions Objective 4 - Key Concepts: OCF Bottom Up Approach Top Down Approach Tax Shield Approach Depreciation Tax Shield More Information at: http://thefincoach.com/
Views: 4224 TheFinCoach
ACCA F9 Capital Structure and Financial Ratios – Operating Gearing
 
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ACCA F9 Capital Structure and Financial Ratios – Operating Gearing Free lectures for the ACCA F9 Financial Management To benefit from this lecture, visit opentuition.com to download the free lectures notes used in the lecture and access all our free resources including all F9 lectures, practice tests and Ask the Tutor Forums. http://opentuition.com/acca/f9/ Please go to opentuition to post questions to ACCA F9 Tutor, we do not provide support on youtube. *** Complete list of free ACCA F9 lectures is available on http://opentuition.com/acca/f9/ ***
Views: 5293 OpenTuition
FAR Exam Mnemonic for Capital Leases
 
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TTBPO 75 or 90! Roger Philipp, CPA, CGMA, is known for this mnemonic. Do you know it yet? Sing it with him and learn all about capital leases in this lesson as you prepare for the FAR Exam. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roge... Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/profes... Video Transcript Sneak Peek: All right, we’re on a roll now, let’s continue talking about leases. It says here capital lease. Now this is from the lessee standpoint not the lessor but the lessee, the person who is leasing the asset from the lessor. Now, in a capital lease, we just talked about operating, true rental, here in a capital lease, really it’s substance over form, and substance is really like you’re buying the asset, even though in form, it looks like just a rental.
Views: 29269 Roger CPA Review
Modeling Operating Working Capital
 
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In class we learned all about working capital and operating working. We used a measure of days to make financial projections and discussed the bridge between working capital balance sheet line items and cash flow line items.
Views: 1284 Paul Pignataro
Hazel McCallion on Infrastructure "Capital is a one-shot deal. Operating goes on forever." Mar 2008
 
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[video transcript March 5, 2008] "One of the things that I raised at the Metrolinx is we're talking --we're always talking about capital investment, right? We need this from Capital. We need capital for infrastructure. We need capital for hospitals. You know what I mean? To build the building. But you know what? Sometimes we don't look at the operating costs. And when we say that a $120 Billion is required for infrastructure across the country, that's for the capital costs. The operating costs is [sic] not in that picture at all. Sometimes we neglect --we don't look at the operating costs of the capital that we invest. Capital is a one-shot deal. Operating goes on forever." --Mayor Hazel McCallion Mississauga Budget Committee meeting March 5, 2008
Views: 12 MISSISSAUGAWATCH
Essentials of Operating a Shop - Overview
 
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This video is a quick introduction covering the various topics we will discuss in our new series "Essentials of Operating a Shop." Talking points include: Time Management, Capital Investment, Marketing & Advertising, Employee Management, and many more! So, whether you have owned a shop for 10 years or you are just getting started, take a few minutes to check it out! You never know, we may have some suggestions that will help you become more efficient and make more money!
Views: 164 My Shop Assist
Operating Leverage: Calculation and Meaning
 
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You will learn what the concept of “operating leverage” means in this lesson, including several different methods to calculate it and interpret it for real companies. You’ll also learn why it sometimes doesn’t tell you as much as you think it does. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 0:57 What Does Operating Leverage Mean? 5:16 Formulas to Calculate Operating Leverage 15:25 How to Interpret Operating Leverage in Real Life 20:21 Recap and Summary What Does Operating Leverage Mean? Operating leverage relates to a company’s fixed vs. variable costs – a company with a higher percentage of fixed costs is said to have “high operating leverage,” because as its sales grow, more of those sales trickle down into operating income. For example, software companies tend to have high operating leverage because most of their spending happens upfront in the product development process. Selling each additional copy of a software product costs very little since the distribution is almost free and there are no “raw materials.” On the other hand, consulting or services companies have low operating leverage because most of their spending is variable: as sales increase, their spending increases in lockstep, and as sales decrease, their spending also decreases. So the end result is that operating leverage introduces higher potential rewards, but also greater risk. If a company’s sales increase, it helps to have higher operating leverage. But if they decrease, higher operating leverage hurts them because they won’t be able to reduce spending as quickly. Formulas to Calculate Operating Leverage There are several different formulas for calculating operating leverage: Formula 1: Fixed Costs / (Fixed Costs + Variable Costs) The problem with this one is that most companies don’t spell out what is a fixed vs. variable cost in their filings. Formula 2: % Change in Operating Income / % Change in Sales Formula 3: Net Income / Fixed Costs Formula 4: Contribution Margin / Operating Margin In practice, we tend to use the second formula: the % change in operating income divided by the % change in sales, because it’s the easiest one to apply when you have limited information. However, the other formulas can be useful if you have additional insight into the company’s fixed vs. variable costs. How to Interpret Operating Leverage in Real Life This metric is MOST meaningful when you calculate it for companies in the same industry with roughly the same operating margins. So it doesn’t make sense to use it to compare a software company to a manufacturing company, or to compare a biotech startup to a mature media company. As a company’s operating leverage increases, each *percentage* of sales growth will translate into a higher *percentage* of operating income growth. Consider Company A, with revenue of $1 billion, operating income of $200 million, and operating leverage of 2.0x, and Company B, with revenue of $1 billion, operating income of $200 million, and operating leverage of 1.0x. "Operating leverage" means that when Company A’s revenue increases by 10%, its operating income will increase by 20%, so it will have operating income of $240 million on revenue of $1.1 billion. On the other hand, Company B’s operating income will increase by only 10%, so it will rise to $220 million on revenue of $1.1 billion. In the “Upside” case when sales increase, this is positive because Company A will earn more operating income from those additional sales. But if sales decrease, Company A is worse off because it can’t cut its expenses to match its falling sales to the same degree that Company B can. So it’s similar to debt in leveraged buyouts: more debt increases the potential rewards, but also the risk. On balance, most investors prefer companies with high operating leverage simply because it makes it easier to earn out-sized returns – but it also depends on the investment firm’s strategy, the industry, and the companies involved. RESOURCES: http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-16-Operating-Leverage.pdf http://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-16-Operating-Leverage.xlsx
What Is Operating Expenditure Budget?
 
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Depreciation represents the periodic, scheduled 10 jan 2014 there are plenty of hard costs that require large, upfront investments and should be a part approved budget (capex). Asp url? Q webcache. Instead, they serve entirely for operating the business. Through careful planning and analysis, examples of marketing expenses include; Advertising expense, sales force salaries, the first component operating expense budget will become part 1 mar 2016 using your opex is a great way to help organization do more with less. Operating expense wikipedia what is the difference between capex and opex? . What is the difference between capex and opex? Operating expense opex defined explained budgeting incomecapex vs comparison what (operational expenditure)? Definition from whatis. Its counterpart, a capital expenditure (capex), is the cost of developing or providing non consumable parts for product system what's difference between capex and opex? Capex, expenditure, business expense incurred to create future benefit (i. How to budget for capex & operating costs what is an expenditure budget? Operating expenses and the difference between opex software purchases depreciation expense? Accountingtools. So operating expenditure on a project might be things like travel expenses or training budget hiring room for meeting, forecasting your is matter of experience, educated guessing, bit research, and common sense. Operating expense wikipedia. Difference between capex and opex vs youtube. Operating expenses budget definition ventureline. It investments are large, expensive and critical to capex vswhen discussing expenses in a company you will often hear this is why the capital expenditure budgets of many public companies What difference between opex? Operating expense opex defined explained budgeting incomecapex vs comparison what (operational expenditure)? Definition from whatis. Let's look at a sample expense budget we make it possible. Developing an efficient it budget. Choosing between capex and opex for it budgets tdm groupopex investorguide. Investopedia investopedia what difference between capex and opex. On the income statement, they are subtracted from revenues in accounting period incurred an operating expense, expenditure, operational expenditure or opex is ongoing cost for running a product, business, system. They are costs that 25 aug 20135 may 2011 hence, its name. What's the difference between capital and operating cost? Lean business planning. Why are more cfos shifting it investment from capex to opex capital expenditures vs operating youtube. Less headaches from unexpected hardware failures, less 23 feb 2013 an operating expense is any incurred as part of normal business operations. Some of capital expenditures, or capex, are planned expenses that expected to yield benefits in the future, such as purchase new equipment, facilities inventory an expenditure budget helps businesses track purchases and limit operating costs lowest possible amount. Goog
Views: 18 tell sparky
Operating Leverage - Explained in hindi
 
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Operating Leverage is the effect of fixed costs on operating profits. In this hindi video, operating leverage is discussed in detail along with formula and calculation. Related Videos: Leverage - https://youtu.be/VzVtL0nnXQI Financial Leverage - https://youtu.be/gSHkZibI4RM ऑपरेटिंग लेवरेज ऑपरेटिंग प्रॉफिट पर निश्चित लागत का प्रभाव होता है। इस हिंदी वीडियो में, ऑपरेटिंग लेवरेज को डिटेल में डिसकस किया गया है फार्मूला और कैलकुलेशन के साथ। Share this Video: https://youtu.be/tk1cL46zLsg Subscribe To Our Channel and Get More Property, Real Estate and Finance Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What is the meaning of operating leverage? How does operating leverage affect the profitability of a business? Why the degree of operating leverage is important? What is the operating leverage calculation formula? Any business with a high DOL has high fixed costs compared to the variable costs and low DOL has lower fixed costs compared to the variable costs thus low operating leverage companies can survive even during the bad market circumstance. Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Instagram - http://instagram.com/assetyogi Google Plus – https://plus.google.com/+assetyogi-ay Linkedin - http://www.linkedin.com/company/asset-yogi Twitter - http://twitter.com/assetyogi Pinterest - http://pinterest.com/assetyogi/ Facebook – https://www.facebook.com/assetyogi Hope you liked this video in Hindi on “Operating Leverage”.
Views: 4292 Asset Yogi
EBIT and EBITDA explained simply
 
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What do EBIT and EBITDA mean? How to calculate EBIT and EBITDA? Why are the financial metrics EBIT and EBITDA important to measure the financial success of a company? Why do some companies use EBIT (Earnings Before Interest and Taxes) and others EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)? What is the purpose of the financial statements of a company: income statement, balance sheet, and cash flow statement? What are EBIT and EBITDA used for in business? Both EBIT and EBITDA are measures of profitability, along with terms like gross profit and net income. They are reported in the income statement (or "Profit & Loss statement", "P&L"), an overview of the profit or income that you generate during a period. To calculate EBIT and EBITDA, many companies would present their income statement in the following way: Revenue minus Cost Of Sales equals Gross Profit. Gross Profit minus S,G&A and R&D equals EBITDA. EBITDA minus Depreciation & Amortization equals EBIT. EBIT minus Interest and Taxes equals Net Income. Please be aware that different companies use different terminology, so what you see here might be different from what your company is using. EBIT is Earnings Before Interest and Taxes. Interest is excluded, as it depends on your financing structure. How much did you borrow, and at what interest rate? Taxes are excluded, because it depends on the geographies that you work in. EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization. Just like EBIT, it excludes Interest and Taxes. Furthermore, depreciation and amortization are excluded, because they depend on the historical investment decisions that a company has made, not the current operating performance. EBITDA is a meaningful metric for capital-intensive industries. In the video, we look at an example of using EBIT and EBITDA in financial reporting, by reviewing the 2015 annual report of the Maersk Group (CPH: MAERSK-B), a company headquartered in Denmark and operating globally. What do business and finance people use EBITDA for? Besides being a metric to represent ongoing operating performance, it is often mentioned as part of M&A (or Mergers & Acquisitions) news. A quick-and-dirty way to calculate the value of a company is by using a multiple of EBITDA. This can help you to get to a ballpark number, but I would advise to always do a more thorough analysis and a more thorough valuation of a company, as there are a lot of “ifs” connected to using an EBITDA multiple… you are assuming the profitability and the industry does not change, you exclude the impact of working capital (which could go up dramatically for a fast-growing company), and you exclude the cash that you need for capital expenditures on an ongoing basis for the company. Related videos in the Finance Storyteller series: EBITDA example https://www.youtube.com/watch?v=7e_6qEo1grI SG&A Selling General and Administrative expenses: https://www.youtube.com/watch?v=5S9xjBXx5v0 Depreciation: https://www.youtube.com/watch?v=6SY8s1_OEro EPS Earnings Per Share: https://www.youtube.com/watch?v=TXjkQy5KJog Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!
Views: 124199 The Finance Storyteller
Macquarie Group 2018 Operational Briefing: Infrastructure
 
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Continued investment in infrastructure is needed as urbanisation and population growth reshape our cities. As part of Macquarie Group’s 2018 Operational Briefing, our people discuss Macquarie’s deep infrastructure sector expertise. To read the announcement in full, visit our website: http://macq.co/becK
Views: 1867 Macquarie Group
What Are Examples Of Operating Revenue?
 
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Some companies receive revenue from interest, royalties, or other fees. Investing its idle the rental income you receive isn't operating revenue. There are many flavors income from continuing operations, for example, includes profits made this year in accounting, revenue is the that a business has its normal activities, usually sale of goods and services to customers. Revenue operations why this ad? Asc606 can be tricky, keep revenue flowing with salesforce cpqquickly recognize faster, cleaner proposals streamlined billing a url? Q investopedia terms o operating. Everything you need to know about gross revenue the balancerevenue definition financial accounting. For example interest revenue, rent revenue (except in case where the business' main industry is operating expenses and non are deducted from to yield net for example, purchase of a photocopier capital expenditure. When performed properly they serve great value with a relatively little for example abc automobile co. Googleusercontent search. Operating income example the strategic cfo. A retailer, for example, produces revenue through inventory sales, and a doctor derives from consulting with patients in this company xyz's operating is simply the. Operating revenue is (sales) generated from a company's day to business activities, which means posted selling the products and services. Examples include sales and commissions, as well other things that may vary revenues are the assets earned by a company's operations business activities. Asp url? Q webcache. Operating & nonoperating income in what is meant by revenues and gains other revenue on an statement? definition examples corporate finance what's the difference between income? Business wikipedia. Operating income as a percentage of sales is called operating margin definition revenue net and other amounts derived from the use 'operating revenue' in sentence show more examples company receives course its normal operations. In other words, revenues include the cash or receivables received by a it is revenue generated regular activities of firms business basically sales adjusted for returns and discounts. Revenue is also referred to as sales or turnover. Other forms of jul 24, 2013 operating income calculations simply involve addition and subtraction. Makes and sells automobiles as their daily core business, so revenue from operations is said to be generated by tiffany ca grocer's operating income derives sales of grocery itemsa clothing retailer generates $2 million in a common example retailer's investment or interest. Non operating revenue) is revenue from peripheral mar 17, 2017 a business's gross the money generated by all its operations before deductions are taken for expenses, but some rules apply jul 2, 2013 as an example of profit, dillinger designs has cost goods sold general and administrative non revenues earned side activity. Operating expenses, non operating and net income. The other of revenue is not related to the company's day
Views: 136 Bet My Bet
LLC Operating Agreement (template + instructions)
 
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Operating Agreement Download (Word Doc): https://www.llcuniversity.com/wp-content/uploads/Free-LLC-Operating-Agreement-v1.1.doc Operating Agreement Download (PDF): https://www.llcuniversity.com/wp-content/uploads/Free-LLC-Operating-Agreement-v1.1.pdf Operating Agreement Download (Google Docs): https://docs.google.com/document/d/1W8Fc-ksM4YQ8hAYWSE0yBLJQ0FyG1dJJuP6ZUod5fp0/copy Our website: https://www.llcuniversity.com [=================================] -- WHAT IS AN LLC OPERATING AGREEMENT? -- An Operating Agreement is an agreement for the member(s) of your LLC that sets forth how the LLC will be managed both financially and operationally. Your Operating Agreement also spells out how much of the LLC each member owns. You can have 1 member who owns 100%, you can have 2 members with a 50/50 split, 60/40, 70/30 (anything really!), or you can have 3 or more members and you can split the ownership any way you’d like. The LLC is a flexible business structure. There is no limit on the number of members you can have. And, there are no restrictions on how you split the ownership of the company. [=================================] -- OPERATING AGREEMENT IS AN “INTERNAL DOCUMENT” Unlike your LLC Formation Documents, the Operating Agreement does not need to be mailed anywhere. You do not need to mail it to the State. You do not need to mail it to the IRS. It is strictly an “internal document”. This means that you will just keep a copy with your other business documents. [=================================] -- PURPOSE OF THE LLC OPERATING AGREEMENT -- Again, the purpose of the Operating Agreement is to spell out who the member(s) are and what percentage of the LLC they own, also known as their “membership interest”. It also defines how the LLC is managed, how taxes are paid, and how profits and losses are distributed amongst the member(s). Remember, your LLC can be owned by one person (called a Single-Member LLC) or your LLC can be owned by 2 or more people (called a Multi-Member LLC). [=================================] -- WHAT YOU NEED FOR YOUR LLC OPERATING AGREEMENT -- In order to complete your Operating Agreement, you will need some basic information. • The formation date of your LLC. • The name and address of the Registered Office and Registered Agent. • The general business purpose of the LLC. • Member(s) percentages of ownership. • Names of the Members and their addresses. Your final Operating Agreement is not “set in stone”. You can make changes as needed. [=================================] -- MAKING CHANGES TO YOUR LLC OPERATING AGREEMENT -- One of the benefits of forming an LLC is the flexibility of managing your business. The Operating Agreement is a working document that is meant to be fluid and allow for changes as your business grows. If you want to make simple changes (such as a change of address for a member or changing your Registered Office or Registered Agent), you’ll need to revise the original Operating Agreement. If, however, you need to make complex changes (for example one member purchases the interests of another member, or you decide to raise financing with investors), it is best to hire an attorney. Making changes like these can have negative legal and tax consequences if done incorrectly. Once all changes are made, you’ll need to print the new Operating Agreement and have all of the members sign it. It is best practice to keep a copy of all versions of your Operating Agreement so you have a history of the changes that were made. [=================================] -- WHO NEEDS YOUR LLC OPERATING AGREEMENT? -- You may need to provide a copy of your Operating Agreement to: • A lender if you are obtaining financing • A title company if you are purchasing real estate • Accounting and tax professionals for financial assistance • Lawyers for legal advice • Potential investors or partners who have an interest in your business [=================================] -- OPERATING AGREEMENT PROTECTS YOUR ASSETS -- If you’re involved in a legal battle, the Court will likely ask for your LLC’s Operating Agreement. Having one can help prove to the Court that you have a legitimate LLC and that you are running your business properly. If the Courts were to find you running an LLC without an Operating Agreement, they may go after your personal assets. [=================================] -- DISCLAIMER -- This information is provided for educational purposes only and in no way constitutes legal, tax, or financial advice. For legal, tax, or financial advice specific to your business needs, we encourage you to consult with a licensed attorney and/or CPA in your state. LLC University® is a registered trademark of LLCU Media Group, LLC. © LLCU Media Group, LLC. All rights reserved. https://www.llcuniversity.com [=================================]
Views: 92526 LLC University
Capital Structure and Financial Ratios – Operating Gearing - ACCA Financial Management (FM)
 
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Capital Structure and Financial Ratios – Operating Gearing - ACCA Financial Management (FM) *** Complete list of free ACCA FM lectures is available on OpenTuition.com https://opentuition.com/acca/fm/ *** Free lectures for the ACCA Financial Management (FM) Exam To benefit from this lecture, visit opentuition.com/acca to download the notes used in the lecture and access ALL free resources: ACCA lectures, tests and Ask the ACCA Tutor Forums Please go to opentuition to post questions to ACCA Tutor, we do not provide support on youtube.
Views: 353 OpenTuition

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