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Fin Cheat Sheet

This document provides definitions and formulas for key financial metrics used to analyze companies. It includes calculations for net working capital, EBIT, average tax rate, market capitalization, MVA, market-to-book ratio, EVA, total capitalization, ROA, ROE, asset turnover ratio, inventory turnover, average days in inventory, receivables turnover, average collection period, profit margin, operating profit margin, long term debt ratio, total debt ratio, times interest earned, cash coverage ratio, net working capital to assets, current ratio, quick ratio, cash ratio, present value, future value, annuity factors, perpetuity, effective interest rates, and the relationship between nominal interest rates, real interest rates,

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Christina Romano
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84 views

Fin Cheat Sheet

This document provides definitions and formulas for key financial metrics used to analyze companies. It includes calculations for net working capital, EBIT, average tax rate, market capitalization, MVA, market-to-book ratio, EVA, total capitalization, ROA, ROE, asset turnover ratio, inventory turnover, average days in inventory, receivables turnover, average collection period, profit margin, operating profit margin, long term debt ratio, total debt ratio, times interest earned, cash coverage ratio, net working capital to assets, current ratio, quick ratio, cash ratio, present value, future value, annuity factors, perpetuity, effective interest rates, and the relationship between nominal interest rates, real interest rates,

Uploaded by

Christina Romano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Fin cheat sheet

Current assest – current liabilities = net working capital

Earnings before interest and taxes (EBIT) = total revenues + other income – costs – depreciation

Average tax rate = total tax bill / total income

Market capitalization: total market value of equity = share price * number of share outstanding

Market value added (MVA) = market cap – book value of equity

Market – to – book ratio = market value of equity/book value of equity

Economic value added (EVA):. = net income – a charge for the cost of capital employed

= after tax interest + net income – (cost of capital * total capitalization)

= after tax operating income – (cost of capital * total capitalization)

Total capitalization = long term debt + shareholders equity

After-tax operating income = (1 - tax rate) × interest expense + net income

Return on Capital (ROC) = after tax operating income/total capitalization

Return on assets (ROA) = after tax operating income/total assets

Return on equity (ROE) = net income/equity


Asset turnover ratio = sales/total assets at the start of the year

Inventory turnover = cogs/inventory at the start of the year

average days in inventory = inventory at the start of the year/daily cogs

Receivables turnover = sales/receivables at the start of the year

average collection period = receivables at the start of the year/average daily sales

Profit margin = net income/sales

Operating profit margin = after tax operating income/sales

Long term debt ratio = long term debt/(long term debt +equity)

Long term debt equity ratio = long term debt/ratio

Total debt ratio = total liabilities/total assets

Times interest earned = EBIT/interest payments

Cash coverage ratio = (EBIT + depreciation)/interest payments

Net working capital to assets = net working capital/total assets

Current ratio = current assets/current liabilities

Quick ratio = (cash + marketable securities + receivables)/current liabilities

Cash ratio = (cash + marketable securities)/current liabilities


Interest (after one year) = initial investment * (1 + r)

Future value (FV) = initial investment* (1+r)

present value (PV) = future value / interest rate

discount factor is 1/(1+r)t

PV of t-value annuity = C[(1/r)-(1/(r(1+r)t))]

T- year annuity factor ( in the brackets)

Future value of an annuity = PV of annuity * (1+r)t= (((1+r)t-1)/r)

PV annuity factor = [1-(1/(1+r)t)-1]/r

FV annuity factor = [(1+r)t-1]/r

Cash payment from perpetuity = r * PV

PV of perpetuity = cash payment/r

PV of annuity due = PV of ordinary annuity * (1+r)

FV of annuity due = FV of ordinary annuity * (1+r)

1 + effective annual interest rate = (1+monthly rate)12

Monthly interest rate = APR/12

R = nominal rate; r = real rate; h = inflation rate

1+R = (1+r)*(1+h) OR R=r+h+r*h

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