Percentage of Sales
What is profit margin?
As growth for a firm continues beyond "low levels of growth," this will be required.
The alternate way of solving for equity multiplier.
What is 1 + (D/E)?
In this method, a specified number of shares are bought by underwriters and sold at a higher price.
What is a firm commitment cash offer?
This type of offering allows current shareholders to buy new shares at a discount to avoid dilution.
What is a rights offering?
If a firm is operating at full capacity, all assets vary directly with this.
What is sales?
IGR tells us how much a firm can grow assets using only this.
What are retained earnings?
If given the retention ratio, and you need to know the dividend payout ratio, solve by this using this equation.
What is 1 - Retention Ratio?
In a direct rights offer, the company offers the new stock directly to these people.
What are existing shareholders?
This is the typical duration for a lockup period for insiders after an IPO.
What is 180 days?
Notes payable, LTD, and equity are considered these. Therefore, notes payable, LTD, and equity do not vary directly with sales.
What are financing decisions?
What is total asset turnover?
1 - (Dividends / Net Income) conveniently solves for this important number.
What is Retention Ratio? (b)
This is the only private method for issuing new capital.
What is direct placement?
Daily Double!
This type of financing turns illiquid assets into tradable securities.
At this level of growth, internal financing may exceed the required investment in assets.
What is low growth?
Both IGR and SGR assume that this remains constant.
What is the dividend payout ratio?
When completing the pro forma balance sheet, Y2 equity is calculated by adding these.
What is Y1 Equity + Y2 Dividends?
In a Dutch auction cash offer, investment bankers auction shares to determine this.
What is the highest offer price obtainable?
This allows companies to register a large issue and sell it off in smaller chunks over time.
What is shelf registration?
This is the main source of internal financing for a firm.
What is retained earnings?
The goal of SGR is to identify how much a firm can grow its assets by using internally-generated and issuing debt, all while keeping this constant.
What is debt ratio?
TAT is the reciprocal of this.
What is capital intesisty ratio?
In a standby rights offer, these are guaranteed by the underwriters.
What are net proceeds?
What is a term loan?