Scribd
Upload
20 views

Formula

This document contains a list of financial ratios, time value of money formulae, cost of capital calculations, risk and return measures, bond and share valuation methods, and capital budgeting techniques. It includes definitions for ratios like gross profit percentage, current ratio, and return on equity. It also lists formulas for future and present value, weighted average cost of capital, standard deviation, internal rate of return, leverage, and other capital budgeting metrics.

Uploaded by

ZIKIE CHOY
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
20 views

Formula

This document contains a list of financial ratios, time value of money formulae, cost of capital calculations, risk and return measures, bond and share valuation methods, and capital budgeting techniques. It includes definitions for ratios like gross profit percentage, current ratio, and return on equity. It also lists formulas for future and present value, weighted average cost of capital, standard deviation, internal rate of return, leverage, and other capital budgeting metrics.

Uploaded by

ZIKIE CHOY
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

LIST OF FORMULAE – COMPLETE

FINANCIAL RATIOS ANALYSIS:

Gross profit
Gross Profit Percentage = x 100%
Sales

Net Profit
Net Profit Percentage = x 100%
Sales

Net Income
Return on Total Assets = x 100%
Total Assets

Current Assets
Current Ratio =
Current Liabilities

Current Assets−Inventory
Quick Ratio =
Current Liabilities

Sales
Sales to Fixed Assets Ratio =
Fixed Assets

Sales
Total Assets Turnover =
Total Assets

Net Credit Sales


Receivables Turnover Ratio =
Receivables

Receivables
Receivables Turnover Ratio (in days) = x 365 days
Net Credit Sales

Net Credit Purchases


Payables Turnover Ratio =
Payables

Payables
Payables Turnover Ratio (in days) = x 365 days
Net Credit Purchases

Cost of Sales
Inventory Turnover Ratio =
Inventory

Inventory
Inventory Turnover (in days) = x 365 days
Cost of Sales

Total Debt
Debt to Total Assets = x 100%
Total Assets

Total Debt
Debt to Equity = x 100%
Common Equity
Earnings Before Interest and Taxes (EBIT)
Times Interest Earned =
Interest Expenses

Earnings Before Interest and Taxes (EBIT)


Return on Capital Employed = x 100%
Capital Employed

Capital Employed = Long Term Debts + Equity

Earnings Attributable to Ordinary Shareholders


Earnings per Share = x 100 cents
Number of Ordinary Share in Issue

Price per Share


P/E Ratio =
Earnings per Share

Profit After Tax


Return on Equity = x 100%
Total Shareholders′ Equity

TIME VALUE OF MONEY:


FV = PV x (1 + k)n

FV
PV =
(1+k)n

(1+k)n − 1
FVA = PMT x
k

1
1−(1+k)n
PVA = PMT x
k

COST OF CAPITAL:
ATkd = k(1 –t)

D
kp =
P−F

D
ks = +g
P

D
kn = +g
P−F

WACC (ka) = wkd (AT kd) + wkp (AT kp) + wks (AT ks)
RISK AND RETURNS:
Mean, µ = ∑ (Vi x Pi)

Standard deviation, 𝜎 = √[∑Pi (Vi − µ)²]

BOND VALUATION & SHARES VALUATION:


1
1−(1+k)n M
V = INT x +
k (1+k)n

D
P=
k−g

D
k= +g
P

CAPITAL BUDGETING:

ARR =
𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐚𝐧𝐧𝐮𝐚𝐥 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐢𝐧𝐜𝐨𝐦𝐞 𝐟𝐫𝐨𝐦 𝐚𝐬𝐬𝐞𝐭
𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐚𝐦𝐨𝐮𝐧𝐭 𝐢𝐧𝐯𝐞𝐬𝐭𝐞𝐝 𝐢𝐧 𝐚𝐬𝐬𝐞𝐭

or

Average net cash inflow from asset−Annual depreciation from asset


1
(Amount invested in asset+Residual value)
2

Amount invested
Payback period =
Expected annual net cash inflows

NPV
Profitability Index (PI) = 𝑥 100
Initial Investment
IRR formula (Unequal Cash Flows):

Leverage:
% 𝐸𝐵𝐼𝑇 𝑆𝑎𝑙𝑒𝑠 −𝑉𝐶
DOL = % or DOL =
𝑆𝐴𝐿𝐸𝑆 𝑆𝑎𝑙𝑒𝑠 −𝑉𝐶 −𝐹𝐶

% ∆ EBIT = % ∆ Sales x DOL

% 𝑁𝐼 𝐸𝐵𝐼𝑇
DFL = % or DFL = 𝐸𝐵𝐼𝑇 −𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝐸𝐵𝐼𝑇

% ∆ NI = % ∆ EBIT x DFL

% 𝑁𝐼 𝑆𝑎𝑙𝑒𝑠 −𝑉𝐶
DCL = % or DCL = 𝑆𝑎𝑙𝑒𝑠
𝑆𝑎𝑙𝑒𝑠 −𝑉𝐶 −𝐹𝐶 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡

You might also like