CFA LEVEL 1 FRA COMPLETE STUDY AHEAD EXAM SOLUTION FOR 2022 EXAM
Current Ratio - Current Assets divided by current liabilities
Quick Ratio - Cash plus marketable securities plus receivables divided by current liabilities
Cash Ratio - Cash plus marketable securities divided by current liabilities
Defensive Interval Ratio - Cash plus marketable securities plus receivables divided by average
daily expenditures
Cash Conversion cycle - days in inventory plus days in accounts receivables minus days in
accounts payable
Accounts receivable turnover - revenue divided by average accounts receivable
inventory turnover - cost of goods sold divided by average inventory
Accounts payable turnover - purchases divided by average accounts payable
Cost of Goods Sold - Beginning inventory plus purchases minus ending inventory
Operating cycle - days in inventory plus days in accounts receivable
Fixed asset turnover - revenue divided by average net fixed assets
working capital turnover - revenue divided by average working capital
equity turnover - revenue divided by average equity
debt to equity ratio - total debt divided by total equity
debt ratio - total debt divided by total assets
debt to total capital ratio - total debt divided by total debt plus total equity
Financial leverage ratio - average total assets divided by average total equity
interest coverage ratio - EBIT divided by interest payments
Fixed charge coverage ratio - EBIT plus lease payments divided by interest payments plus lease
payments
Gross profit - Sales minus cost of goods sold
, Gross profit margin - gross profit divided by revenue
operating profit margin - operating profit divided by revenue
pretax margin - earnings before tax divided by revenue
Net profit margin - net income divided by revenue
Return on assets - net income divided by average total assets
Return on Assets - EBIT divided by average total assets
operating return on assets - operating profit divided by average total assets
return on total capital - EBIT divided by average total capital
Return on Equity - net income divided by average total equity
Return on Equity - Return on Assets times financial leverage
Return on Equity - Net profit margin times asset turnover times leverage ratio
Return on common equity - net income minus preferred dividends divided by average common
equity
DuPont Formula - Net profit margin times total asset turnover times leverage
Net Profit margin - net income divided by revenue
Total asset turnover - Revenue divided by average assets
Leverage - Average assets divided by average equity
Extended DuPont Formula - Tax burden times interest burden times operating profit margin
times asset turnover times leverage
Tax burden - Earnings after tax divided by earnings before tax
Interest burden - Earnings before tax divided by EBIT
Operating profit margin - EBIT divided by revenue
Total asset turnover - revenue divided by average assets
Current Ratio - Current Assets divided by current liabilities
Quick Ratio - Cash plus marketable securities plus receivables divided by current liabilities
Cash Ratio - Cash plus marketable securities divided by current liabilities
Defensive Interval Ratio - Cash plus marketable securities plus receivables divided by average
daily expenditures
Cash Conversion cycle - days in inventory plus days in accounts receivables minus days in
accounts payable
Accounts receivable turnover - revenue divided by average accounts receivable
inventory turnover - cost of goods sold divided by average inventory
Accounts payable turnover - purchases divided by average accounts payable
Cost of Goods Sold - Beginning inventory plus purchases minus ending inventory
Operating cycle - days in inventory plus days in accounts receivable
Fixed asset turnover - revenue divided by average net fixed assets
working capital turnover - revenue divided by average working capital
equity turnover - revenue divided by average equity
debt to equity ratio - total debt divided by total equity
debt ratio - total debt divided by total assets
debt to total capital ratio - total debt divided by total debt plus total equity
Financial leverage ratio - average total assets divided by average total equity
interest coverage ratio - EBIT divided by interest payments
Fixed charge coverage ratio - EBIT plus lease payments divided by interest payments plus lease
payments
Gross profit - Sales minus cost of goods sold
, Gross profit margin - gross profit divided by revenue
operating profit margin - operating profit divided by revenue
pretax margin - earnings before tax divided by revenue
Net profit margin - net income divided by revenue
Return on assets - net income divided by average total assets
Return on Assets - EBIT divided by average total assets
operating return on assets - operating profit divided by average total assets
return on total capital - EBIT divided by average total capital
Return on Equity - net income divided by average total equity
Return on Equity - Return on Assets times financial leverage
Return on Equity - Net profit margin times asset turnover times leverage ratio
Return on common equity - net income minus preferred dividends divided by average common
equity
DuPont Formula - Net profit margin times total asset turnover times leverage
Net Profit margin - net income divided by revenue
Total asset turnover - Revenue divided by average assets
Leverage - Average assets divided by average equity
Extended DuPont Formula - Tax burden times interest burden times operating profit margin
times asset turnover times leverage
Tax burden - Earnings after tax divided by earnings before tax
Interest burden - Earnings before tax divided by EBIT
Operating profit margin - EBIT divided by revenue
Total asset turnover - revenue divided by average assets
