Any mnemonics about Corporate governance? Never seem to remember the committee responsibilities, corporate governance attributes and objectives.
Whats this one for??? Thax
Old thread but never irrelevant…
To get underlying earnings I remember to use a RAAG-PC to clean up earnings from nonrecurring stuff
Restructuring costs
Amortization of intangibles acquired
Asset write-downs
Goodwill impairment
Provision for future losses
Changes in accounting methods
“No Share Lit Green” + “Pac-Cap-Crown” + WW
…for post-takeover bid defense strategies
Just say NO
Share repurchase
LIT - igation
Green - mail
Pac man defense
Leveraged re cap italization
Crown jewel
W hite knight
W hite squire
Oldie, but goodie for hypothesis testing with p-values:
alpha > p-value – reject Ho
alpha < p-value – FTR Ho
Here’s where it gets “crazy”-- read the following without the words in the brackets at first, then clarify with brackets if needed:
If the p [value] is too low, reject that Ho(e) — Never again will you forget that p-value < alpha (too low, less than alpha) means reject Ho
Think about it… let it marinate… I can’t take credit for this, though, as it’s not mine…
Edit: I’ll add the G-rated version as well
The alpha symbol looks like a fish and p-value stands for pond…
If the fish is bigger than the pond, reject Ho (alpha>p-value)
If the fish is smaller than the pond, FTR Ho (alpha < p-value)
Durbin Watson was american psycho, a handsome serial killer. Breusch Pagan was a homo hating white supremecist. For pensions- Benefits of taking BCAAs- Benefits= Beggining + Contributions + Actual - Assets For port mgmt- Optimal Risk- errrr too risky … IR/2*risk coefficient all really stupid stuff but it helps me remember it so whatever works i guess.
“Two energetic homos W ho K now their shit” has all I need to deal with heteroskedasticity
test stat is : nR^2 (two n-r-getic):
homos: we want to make sure we’re not dealing with heteroskedasticity
w ho: White standard errors for correction
k now : k degrees of freedom
shit: stat follows a Chi-square distribution
“Two energetic homos W ho K now their shit” has all I need to deal with heteroskedasticity
test stat is : nR^2 (two n-r-getic):
homos: we want to make sure we’re not dealing with heteroskedasticity
w ho: White standard errors for correction
k now : k degrees of freedom
shit: stat follows a Chi-square distribution
Goodwill:
F ull Good will = F air Value - F air value of net identifiable assets
P artial Good will = P urchase P rice - P roportion of net identifiable assets.
I leave this one to your imagination:
Ho-Lee Model…
BIDE
Beginning (retained earnings + (net) Income - Dividends = Ending Retained Earnings
RIG (or Trig)
for temporal calculate Retain earnings, net income, remeasurement Gain
ET (or CET)
foi current- retained earnings translational adjustment
You guys have really complicated mnemonics. I mean, if i were to learn by heart a whole sentence or poem, I better learn the thing like it is.
For my part, I do it as simple as alphabetical order :
S -> E
T -> I
=> Means available for S ale in E quity, held for T rading in I ncome/S
Greeks for options (C=call, P=put, D=delta, R=rho, T=time, V=vega, X=exercise)
C P
D + -
R + -
T - -
V + +
X - +
And so on…
For FCFF / FCFE formulas from Net income FCFF: “Johnny Depp the Fucker with an I-Watch” NI + Dep -FC+ I (1-t) - WC FCFE: “Johnny Depp the Fucker with a Watch and New Blackberry” NI+Dep-FC-WC+NB
Mnemonics: LIFO / FIFO Costs:
I used to be into videography, and the quality of the camera was dependent on the number of “chips” the camera had, 3 being the best (one for each primary color). The chips were called CCIDs.
>>> LIFO C OGS UP
C FO UP
I nventory Turnover UP
D ebt/Equity UP
Equity Method vs. Acquisition Method:
Equity is for EARLE. If you can’t remember earle, just think of black gold, texas tea, the way a southerner would say oil, probably.
>>> Equity E xpenses LOWER
A ssets LOWER
R evenue LOWER
L iabilities LOWER
E quity LOWER
Current Method Vs. Temporal. Credit due to S2000 for this idea but basically just think of it like this:
If the local currency is the same as the fucntional currency, then you are basically just phoning it in to HQ (the presentation currency) saying hey here are the results. This is why you use the current method. It’s like when they say that the Balance Sheet is just a snapshot in time on a particular date but an income statement spans the period.
Conversely, the local currency needs to be remeasured into the functional currency, then you … remeasure it as the events transpired using Average / Historical whatever.
The way to remember temporal is CHH / AHH going down the balance sheet and income statements:
>>> Temporal Current cash and monetary assets (such as cash, notes, debts)
Historical non-monetary accounts (Inventory, Fixed Assets, etc)
Historical (common stock, etc)
Income statement Average Revenue, R&D, Tax
Historical COGS
Historical Dep. Amort
FTN - FU$K The Nation
ROE = Financial Leverage * Total Asset TO * Net Profit Margin
I dont use mnemonics but I kept getting this wrong and got pissed and came up with this. Ended up working well for other sections as well
For Dupont when expanding further I know to always goto the End — Use the letter N — Expand Net Profit Margin = NI / EBT * EBT/EBT * EBIT/R
End when equity investments and equity income was involved I know to only touch the last two letters T and N
Equity investment is subtracted from Assets in TOTAL ASSET TO But not from the asssts variable in Financial leverage
And equity income from associates is subtracted from Net profit margin
I remembered another one: its a rhyme of volatility, calls, callable bonds, OAS, relationship to yield curve … the whole shebang!
The greater the Vol , the greater the call , the greater the slope , the lower the ’ ope.
('ope = OAS in this rhyme since they both begin with “o”)
What this states is that when volatility is higher, the value of the call is higher. The greater the slope of the yield curve, the greater the value of the call.
All of these factors lead to a lower OAS and hopefully based on that you can remember that a call is subtracted from the price of an option free bond meaning the callable bond in aggregate is lower.
By remembering this you can just flip it if asked what happens to the OAS when volatility increases for a putable bond? ie OAS goes up.
For Greeks, I pretend I left my “DVR in Texas” D elta V ol R ho T ime X exercise For Black-Scholes assumptions I use " I’m in Love With the Co - Co - No - No - Euro" Lo g normal distribution of underlying prices Co nstant risk free Co nstant volatility No transaction costs No cash flows Euro pean style option only SMM equations: " Sam, call 9-1-1- to perform CPR on one-twelve" SMM=1-(1-CPR)^1/12 Sam replies: “I can’t man, I gotta prepay on my beginning balance less scheduled repayment” SMM= prepayment/ (Beg balance - scheduled repayment)
For ibbotson Chen model pig y (because this is one pig of an equation. ) Erp= (1+pe growth )(1+inflation)(1+gdp growth) -1 +y -rfr
Like this one. I wasn’t sure whether to add or subract y in my last mock so pigy will make this clear. For the factors favouring growth on Econ I go with the “MILF with s** power” M arkets that are developed + intermediaries I nvestment in education / health L ower taxes/regulatory burden F ree trade and cap/flows S ufficient saving and investment P olitical stability
I don’t get the y for Expected Income component. What’s the reasoning there?
RighT LeFt
Remeasurement(Temporal) = Local to Functional