FIN 3200 Formula Sheet

CASH FLOW
1) CFFA = OCF NCS NWC = CFDebt + CFEquity
2) OCF = EBIT + DEP Taxes = (Sales COGS DEP Interest)(1-tax) + DEP + Interest
3) NCS = Ending net fixed assets (FA) Beginning net FA + Depreciation (DEP)
4) NWC = current assets (CA) current liabilities (CL)
= cash equivalents (CASH) + receivables (REC) + inventories (INV) payables (PAY)
RATIOS
6) Quick = (CA INV)/CL
8) Total Debt (TD) = (TA TE)/TA
10) Equity multiplier (EM) = TA/TE = 1+ DE
12) Cash coverage = (EBIT + DEP)/Interest
14) Days sales in inventory = 365 days/ IT
16) Days sales in receivables = 365 days/ RT
18) Profit margin (PM) = Net income (NI)/Sales
20) ROE = NI/TE
22) PE = stock price/EPS

5) Current = CA/CL
7) Cash = CASH/CL
9) Debt-Equity (DE) = TD/TE
11) Times interest earned (TIE) = EBIT/Interest
13) Inventory turnover (IT) = COGS/INV
15) Receivables turnover (RT) = Sales/REC
17) Total asset turnover (TAT) = Sales/ TA
19) ROA = NI/TA
21) EPS = NI/shares outstanding
stock price

24) Market-to-book (MB) =

23) Price-sales = sales per share

25) EBITDA ratio =

MVstock +BVliabilities -CASH

26) DuPont Identity: ROE = PM TAT EM

EBITDA

27) Dividend payout (DP) = cash dividends / NI

29) Internal growth = (

Market Value (MV)

Book Value (BV)

28) Retention (b) = addition to retained earnings / NI

()

30) Sustainable growth = (

1)

()

1)

TIME VALUE OF MONEY

31) = 0 (1 + )

1
32) 0 =

1+

1
[(1 + ) (1 + ) ]
33) =

1
34) 0 =
[1 ( 1+ ) ]

If m > 1 replace r with (r/m) and t with (t x m), where m is the frequency of interest payments per year.

35) = (1 +

36) = [(1 + )1/ 1]

) 1

BONDS

37) 0() = [1

1
]
(1+)

(1+)

38) YTM = + + + + +

39) (1 + ) = (1 + )(1 + )

40) current yield =

0()

DECISIONS
41) 0 = =

=0
(1+)

43) Payback Period (PB) = Years before cost recovery +

42) Profitability index =

Remaining cost to recover

Cash flow during the last period

Use #43 to find Discounted Payback Period but first discount all cash flows using formula #31.

44) IRR: set 0 = =0 (1+)

= 0 and solve for r.

45) MIRR: @ =

@
(1+)

use discount rate (d) for NPV of outflows and reinvestment rate (i) for the NFV

of inflows, then solve for r.

46) Accounting rate return (ARR) =

()
()

47) After-tax salvage value (ATSV) = ( )

RETURNS
1

48) = + =
0

1 0 +1

49) = =1

50) = (=1(1 + ))1/ 1

51) Var() = 2 =
=1(

=1( )

( ))

52) SD() = = ()

53) () =

54) Risk premium = ()

55) Var() = 2 = =1 ( (( ) ()) )

56) 22_ = 12 21 + 22 22 + 21 2 Cov(1 , 2 )

57) =

Cov(,)

58) =
=1( ) where p = portfolio, N = asset # 59) Sharpe =
60) Reward-to-risk =

()

where i = asset and m = market

Var()
()

61) Value (V) = Equity (E) + Debt (D) + Preferred (P)

62) = + (1 ) +

63) : ( ) = + (( ) + )