FPAC Part II flashcards
FPAC Part II · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Gross Profit Margin
- Ratio of revenue minus cost of goods sold to revenue. It shows how much of each sales dollar remains after direct production costs, before operating expenses.
- Current Ratio
- Current assets divided by current liabilities. It measures short-term liquidity and the ability to settle obligations due within one year using near-term resources.
- Quick Ratio
- Cash, marketable securities, and receivables divided by current liabilities. It excludes inventory and prepaid items, giving a stricter liquidity test than the current ratio.
- DuPont Analysis
- Decomposes return on equity into net profit margin, asset turnover, and equity multiplier. It reveals whether returns come from profitability, efficiency, or leverage.
- Cash Conversion Cycle
- Days inventory outstanding plus days sales outstanding minus days payable outstanding. It estimates how long cash is tied up before collection from customers.
- Free Cash Flow
- Operating cash flow minus capital expenditures. It represents cash available for debt repayment, dividends, buybacks, or reinvestment after maintaining productive capacity.
- Vertical Analysis
- Expresses each financial statement line as a percentage of a base figure, such as revenue or total assets, enabling comparison of cost structure across periods and companies.
- Horizontal Analysis
- Computes the percentage change in each line item from a base period to a later period, highlighting growth or decline trends over time.
- Interest Coverage Ratio
- Earnings before interest and taxes divided by interest expense. It indicates how many times operating earnings can cover required interest payments on debt.
- Return on Assets
- Net income divided by average total assets. It measures how efficiently management uses the asset base to generate profit during the period.
- Inventory Turnover
- Cost of goods sold divided by average inventory. It shows how many times inventory is sold and replaced annually; higher turnover generally implies efficient inventory management.
- Earnings Quality
- The degree to which reported earnings reflect sustainable operating cash flows rather than one-time gains, accrual estimates, or accounting policy choices.
- Contribution Margin
- Revenue minus all variable costs. It measures the amount available to cover fixed costs and contribute to operating profit on each unit or sales dollar.
- Operating Leverage
- The sensitivity of operating income to changes in sales, driven by the proportion of fixed versus variable costs in the cost structure.
- Working Capital
- Current assets minus current liabilities. Positive working capital indicates resources to fund day-to-day operations; negative indicates reliance on short-term financing.
- Debt-to-Equity Ratio
- Total liabilities divided by total shareholders' equity. It quantifies financial leverage and the relative claims of creditors versus owners on the balance sheet.
- Data Governance
- The framework of roles, policies, and standards that assigns data ownership, defines quality rules, and controls access across the data lifecycle.
- ETL versus ELT
- ETL transforms data before loading into a warehouse; ELT loads raw data first and transforms it inside the warehouse, leveraging warehouse compute power.
- Primary Key
- A column or set of columns that uniquely identifies each row in a table. It cannot contain nulls and enforces entity integrity.
- Foreign Key
- A column referencing a primary key in another table. It enforces referential integrity so child records cannot point to nonexistent parent records.
- Inner Join
- A SQL join returning only rows with matching keys in both tables. Nonmatching rows from either table are excluded from the result set.
- Left Outer Join
- A SQL join returning all rows from the left table plus matching rows from the right; unmatched right-side columns are returned as nulls.
- Data Validation Control
- A preventive or detective check such as range, format, or completeness testing that ensures input data meets defined accuracy and integrity rules before use.
- CIA Triad
- Confidentiality, integrity, and availability. These three principles structure information security objectives and guide control design and risk assessment.
- Segregation of Duties
- Dividing incompatible tasks, such as creating a vendor and approving its payment, among different users to prevent fraud and undetected error.
- System of Record
- The authoritative source for a given data element. Other systems consume or replicate its data rather than independently maintaining or overwriting it.
- Audit Trail
- An immutable log recording who accessed or changed data and when. It supports reconstruction of transactions and provides detective control evidence.
- Data Warehouse
- A centralized repository structured for query and reporting that consolidates data from multiple source systems, typically organized by subject and time period.
- Master Data
- Core reference data shared across systems, such as customers, vendors, products, and chart-of-accounts values, requiring centralized stewardship and quality control.
- General Ledger Interface Control
- A control ensuring subledger transactions transfer completely and accurately to the general ledger, often via record counts and reconciliation of batch totals.
- Robotic Process Automation
- Software bots that execute rule-based, repetitive tasks such as data entry and reconciliation, reducing manual effort while requiring exception handling and monitoring controls.
- Data Lineage
- Documentation tracing data from its origin through transformations to its final report, supporting auditability, impact analysis, and error root-cause investigation.