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FINC 3511 - Corporate Finance - Formulas

This document contains formulas related to corporate finance. It includes formulas for net income, operating cash flow, net present value, internal rate of return, weighted average cost of capital, yield to maturity, dividend discount model, and other financial ratios.

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irquadri
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82 views

FINC 3511 - Corporate Finance - Formulas

This document contains formulas related to corporate finance. It includes formulas for net income, operating cash flow, net present value, internal rate of return, weighted average cost of capital, yield to maturity, dividend discount model, and other financial ratios.

Uploaded by

irquadri
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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FINC 3511 - Corporate Finance - Formulas

Net income = (EBIT - INT)(1 - tax rate)

Operating cash flow = NOPAT + Dep

NOPAT = EBIT(1 - tax rate)

Net cash flow = Net income + (Dep + Amort)

MVA = (shares outstanding)(stock price) - (total common equity)


EVA = EBIT(1 - tax rate) - (investor supplied capital)(percentage cost of capital)
Current assets = cash + marketable securities + inventory + accounts receivable
Current ratio = current assets
current liabilities

Basic earning = EBIT


power
Total assets

Inventory turnover =
sales
ratio
inventory

Times interest =
EBIT
earned
Interest charges

Quick ratio = current assets - inventory


current liabilities

Fixed asset =
Sales
turnover
Net fixed assets

Days sales =
receivables
outstanding (annual sales)/365

EBITDA Coverage =
EBITDA + Lease Payments
Ratio
Interest + Principal + Lease
Charges pmts
pmts

Debt ratio =

total debt
total assets

Total asset =
Turnover

Net profit =
margin

Net income
sales

Price earnings
ratio

Sales
total assets
= Price per share
Earnings per share

Market/Book = Market price per share


ratio
Book price per share

Return on total assets =

Net income
Total assets

= (Net profit margin)(Total asset turnover)

Return on common equity = Net income


= (net profit margin)(total asset turnover)(1/(1 debt ratio))
common equity
projected account balance = (old account balance)[(new sales)/(old sales)]
Change in retained earnings = (net profit margin)(sales) dividends
Additional funds needed = projected assets (projected liabilities + projected equity)

k i = k i pi

k P = wi k i

i =1

b P = wi b i

i=1

FVn = PV 1 +
m

n*m

ki = kRF + bi (kM kRF)

i=1

PV = FVn
n*m
1 + i
m

n
1

=
PMT
PVA n

t =1 (1 + i )

FVA n = PMT (1 + i )

n- t

t =1

EAR = 1 +
m

INT N*m
1
1
+M
VB =

t
N* m
m t=1 k b
1+ k b
1+ m
m

VP =

D
kP

Current yield = (annual interest payment)/(current price)


Yield-to-maturity = current yield + capital gain/loss

DNS (1 + gC)

t
NS
D0 (1 + gS ) k S - gC
+
P0 =
t
(1 + k s )
(1 + k s )NS
t =1

D0 (1 + g) = D1
P0 =
ks - g
ks - g
N

1
1
+ M

( VB - FC) = INT
B t

B N
t =1 (1 + k d )
(1 + k d )
(P0 - FC) =

D1
ks - g

( Vps - FC) =

D
kps

WACC = w d k Bd (1 - t) + w p kps + w s k s

Breakpoint total dollar amount of retained earnings available


=
(equity)
fraction of equity in the capital structure
n

NPV =
t =1

CFt

(1 + k )

IO

IO =
t =1

CFt

(1 + IRR )

COFt

(1 + k )
t= 0

CIF (1+ k )

n- t

t= 0

(1+ MIRR )n

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