BA 303 Midterm I Review February 2006
1. This page – know and be comfortable using all topics on this page.
2. Your spreadsheet assignments
3. Your homework assignments
4. Class notes
5. The book
6. Be sure to memorize the necessary formulas (formulas will only be given on the
midterm if indicated below)
Chapter 1 – Intro to Finance
o What is the goal of Finance?
o What types of legal structure do business use?
o What are Debt and Equity? What risks and benefits do debt and equity holders
o Why are ethics important in corporate Finance?
o Sarbanes-Oxley, what is it and why is it significant?
Chapter 2 – Financial Statements
o How to create an Income Statement, Balance Sheet, and Statement of Retained
o How to create and understand the Cash Flow Statement
o Calculation of Operating Cash Flow and Free Cash Flow
o Ratios (know how to use ratios – you need not memorize all the ratios)
o DuPont Identity – memorize the four ratios in the DuPont Identity and be able to
demonstrate the DuPont Identity
Chapter 18 – Pro-Forma Forecasting
o How to create a % of Sales Pro-forma
o Sustainable Growth (formula will be given)
o External Funds Required – what does this term mean and how can it be
calculated? (formula will be given)
Chapter 3 – Time Value of Money
o Present Value
o Future Value
o Mixed cash flow streams
o Annuities (formulas will be given)
o Growing Perpetuities (formula will be given)
o Solving for PV, FV, number of years, or rate
o APR vs. EAR (formula will be given)