LIFO - L = (L)ess, I = (I)nventory, (I)ncome F = (F)or O (just remember that O stands for inflation somehow 
The point of this is to speeden up the process. Instead of thinking whether income and inventory are higher or lower for LIFO, just remember the above. ie. in an inflationary environment, using LIFO would cause ending inventory and net income to be lower than FIFO (due to higher COGS)
Adding to the list: - Diluted EPS numerator still subtracts preferred dividends if they aren’t convertible. If all preferred can be converted (assuming not antidilutive) then just go with Net Income (plus any interest payments net of tax). - Trading securities’ unrealized gains/losses are included in Net Income. Available for sale securities’ unrealized gains/losses are not (they flow through to equity). - Under GAAP, the direct method has to include an indirect method reconciliation, not the other way around. I remember this because a. it’s very rare for a company to use the direct method and b. everyone wants to see how OCF is derived from NI, so they want the disclosure. - GE (I think of General Electric as an EXTRAORDINARY company, at least under Jack Welch, anyways) so G & E are together… meaning extraordinary items are only permitted under GAAP. - Income tax expense (nobody likes taxes, and nobody likes that you have to add the change in DTL and subtract the change in DTA) so taxes payable + deltaDTL + deltraDTA = income tax expense. - Flotation costs “float” to the top, to the very first CF (cash outlay) where they should be added. - Net Operating Cycle means the Cash Conversion Cycle! - Treat the income RE method like valuing a preferred stock. NOI is assumed to continue into perpetuity, so you divide by the discount rate (cap rate) like you would a preferred dividend. Also, a couple helpful (at least I find them helpful) thoughts for the first group: - Non-renewable resources have perfectly elastic supply. For this one, I think about how a renewable resource (use water as the example) has perfectly inelastic supply, and the graph looks just like a well going into the ground. Then I remember that non-renewable is the opposite: perfectly elastic. - OAS < z-volatility spread for a call option, because you need to be compensated for the prepayment risk inherent in a call. Whereas if there’s a put, you’re willing to “give up” some yield for the option to sell the bond.
Sticky this please!
Thanks a lot …
bump!
bump! bump!
tldr
Comprehensive Income = Net Income plus OCI ( PUFE ) P ension o/u funded status U. nrealized Gain/Loss on AFS Sec F. oregign translation adjustment E. ffective portion of a cash flow hedge
Hey Everyone! Don’t forget to reread this thread before the exam! Many useful tips ! Thanks dhyun3 for posting this
Bump, for those of us studying for December.
Yes, why couldn’t I have found this forum before I took the exam in June. 
Good resources; printing for later use! Thanks!
you say "remember than the realized rate of return must fall between the YTM and the Reinvestment Rate. " Where is that in the curriculum? Isn’t the reinvestment rate equal to the YTM if you discount the bonds with the YTM?
Very Very Helpful…Thanks so much, and All the Best!
mriz21 Wrote: ------------------------------------------------------- > you say "remember than the realized rate of return > must fall between the YTM and the Reinvestment > Rate. " > > Where is that in the curriculum? Isn’t the > reinvestment rate equal to the YTM if you discount > the bonds with the YTM? Realized rate of return /= YTM
PUFE is da man FIFO=LIFO
Amazing post!
I wanna add 3 common mistakes - Comprehensive income is NOT other comprehensive income … CI = OCI + NI - Return on Equity is NOT return on COMMON equity - ALWAYS computed basic EPS if question asking for diluted - chances are shares might be antidultive and diluted EPS will be simply basic EPS
BUMP!!~~~
Bump!!
