Financial Statement questions (w/out referencing notes!)

CFA Level II
#1
  1. Give me the Core Operating Margin ratio. 2. How do you calculate cash received by customers? 3. What is the formula for calculating impairment under GAAP and IFRS?
#2
  1. I’ll get back to you 2. Sales = Cash + Increase AR - INcrease Defferred REv, so just swap em round 3. Balance sheet value - fair market value. difference = impairment
#3

Good work on #2. Don’t forget to “+writeoffs” though. I was thinking “Revenue - increase A/R + writeoffs - increase Unearned/Deferred Revenue”. Regarding #3, IFRS differs from GAAP here. IFRS is simply Carrying Value - Recoverable Amount. GAAP is a 2 step process. If Carrying Value > FV Goodwill, an impairment exists. The impairment is Carrying Value - Implied Value of Goodwill. Implied Value of Goodwill is FV Subsidiary - FV Subsidiary’s Net Assets. Know this. Best in June!

#4
  1. EBITDA/sales ? 2. Cash Sales + decrease in AR + increase in unearned revenue 3. I am assuming you are talking about impairment of goodwill IFRS CV of unit - FV of unit GAAP 2 step process i) if CV of unit is greater than FV of unit then it is a case for impairment ii) impaired GW = FV of unit - FV of net assets of that unit.
#5

Yup on impairment. My apologies for not clarifying. Core Operating Margin: (Sales - COGS - SG&A)/Sales

#6

sales-cogs-sg&a / Sales pretty much ebitda/sales

#7

davidyoung@sitkapacific.com Wrote: ------------------------------------------------------- > Good work on #2. Don’t forget to “+writeoffs” > though. I was thinking “Revenue - increase A/R + > writeoffs - increase Unearned/Deferred Revenue”. > > > Regarding #3, IFRS differs from GAAP here. > > IFRS is simply Carrying Value - Recoverable > Amount. > > GAAP is a 2 step process. If Carrying Value > FV > Goodwill, an impairment exists. The impairment is > Carrying Value - Implied Value of Goodwill. > Implied Value of Goodwill is FV Subsidiary - FV > Subsidiary’s Net Assets. > > Know this. > > Best in June! Isnt it : Revenue - increase A/R + writeoffs + increase Unearned/Deferred Revenue".

#8

CCC = Revenue - increase A/R - writeoffs + increase in Unearned/Deferred Revenue. I was wrong prior. Check out page 274, CFAI Volume II, Reading 25. Just rearrange the equation.