New User Special Price Expires in

Let's log you in.

Sign in with Facebook


Don't have a StudySoup account? Create one here!


Create a StudySoup account

Be part of our community, it's free to join!

Sign up with Facebook


Create your account
By creating an account you agree to StudySoup's terms and conditions and privacy policy

Already have a StudySoup account? Login here

Week 6 Notes

by: Laura Notetaker

Week 6 Notes Fin 4310

Laura Notetaker
GPA 3.77
Managerial Finance
Dr. Oscar Varela

Almost Ready


These notes were just uploaded, and will be ready to view shortly.

Purchase these notes here, or revisit this page.

Either way, we'll remind you when they're ready :)

Preview These Notes for FREE

Get a free preview of these Notes, just enter your email below.

Unlock Preview
Unlock Preview

Preview these materials now for free

Why put in your email? Get access to more of this material and other relevant free materials for your school

View Preview

About this Document

These are the notes for week 6.
Managerial Finance
Dr. Oscar Varela
Class Notes
Managerial Finance
25 ?




Popular in Managerial Finance

Popular in Finance

This 3 page Class Notes was uploaded by Laura Notetaker on Friday October 2, 2015. The Class Notes belongs to Fin 4310 at University of Texas at El Paso taught by Dr. Oscar Varela in Summer 2015. Since its upload, it has received 37 views. For similar materials see Managerial Finance in Finance at University of Texas at El Paso.


Reviews for Week 6 Notes


Report this Material


What is Karma?


Karma is the currency of StudySoup.

You can buy or earn more Karma at anytime and redeem it for class notes, study guides, flashcards, and more!

Date Created: 10/02/15
Week 6 Notes A B Earnings 80 million 60 million Shares 10 million 15 million EPS 8 4 Price per share 96 32 PE ratio 12 8 If A pays 48 per share of B It is a stock for stock transfer tax free 4896 50 12 shares of A for each share of B A B 140 million No synergy 10 million shares 15 million shares x 50 175 million shares EPSA 8 140 million 175 million shares EPSB 4 8 x 50 For A to get a gain A would need to buy at a cheaper price Lower than 48 but higher than 32 B has a low PE which means a higher risk and lower growth Chapter 3 1 Profitability ratios Profit margin most important in this category ROA return on assets ROE return on equity Basic Earning Power 2 Debt management ratios Debt ratio most important in this category Debt to equity ratio Times interest earned Fixed charge coverage ratio 3 Asset management Total turnover asset most important in this category Week 6 Notes Inventory turnover Accounts Receivable turnover Days sales outstanding Fixed asset turnover 4 Liquidity ratios Least important Current ratio Quick ratio Du Pont equation Profit margin x total asset turnover Return on Assets Extended Du Pont equation modified ROA 1 Debt ratio ROE These two equations integrate the ratios of ROE and RCA Profit Margin Total asset turnover Railroad High Low Trucks Low High Railroad has a high profit margin because it has a high operating leverage which has a high risk because of the operating leverage and high sales Trucks have a low profit margin because they have a lot of variable costs Degree of operating leverage DOL A EBIT A Revenues DOL quantity price variable cost quantity price variable cost fixed costs If DOL increases is because they have more fixed costs Degree of financial leverage DFL A EPS A EBIT DFL EBIT EBIT Interest f DFL increase is because they have a greater interest Week 6 Notes Insolvent bankruptcy is when the amount of interest is very big Technical insolvent is when current assets is lower than current liabilities


Buy Material

Are you sure you want to buy this material for

25 Karma

Buy Material

BOOM! Enjoy Your Free Notes!

We've added these Notes to your profile, click here to view them now.


You're already Subscribed!

Looks like you've already subscribed to StudySoup, you won't need to purchase another subscription to get this material. To access this material simply click 'View Full Document'

Why people love StudySoup

Bentley McCaw University of Florida

"I was shooting for a perfect 4.0 GPA this semester. Having StudySoup as a study aid was critical to helping me achieve my goal...and I nailed it!"

Amaris Trozzo George Washington University

"I made $350 in just two days after posting my first study guide."

Jim McGreen Ohio University

"Knowing I can count on the Elite Notetaker in my class allows me to focus on what the professor is saying instead of just scribbling notes the whole time and falling behind."

Parker Thompson 500 Startups

"It's a great way for students to improve their educational experience and it seemed like a product that everybody wants, so all the people participating are winning."

Become an Elite Notetaker and start selling your notes online!

Refund Policy


All subscriptions to StudySoup are paid in full at the time of subscribing. To change your credit card information or to cancel your subscription, go to "Edit Settings". All credit card information will be available there. If you should decide to cancel your subscription, it will continue to be valid until the next payment period, as all payments for the current period were made in advance. For special circumstances, please email


StudySoup has more than 1 million course-specific study resources to help students study smarter. If you’re having trouble finding what you’re looking for, our customer support team can help you find what you need! Feel free to contact them here:

Recurring Subscriptions: If you have canceled your recurring subscription on the day of renewal and have not downloaded any documents, you may request a refund by submitting an email to

Satisfaction Guarantee: If you’re not satisfied with your subscription, you can contact us for further help. Contact must be made within 3 business days of your subscription purchase and your refund request will be subject for review.

Please Note: Refunds can never be provided more than 30 days after the initial purchase date regardless of your activity on the site.