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StuDocu is not sponsored or endorsed by any college or universityFinal formulasManagerial Finance 1 (University of Waterloo)StuDocu is not sponsored or endorsed by any college or universityFinal formulasManagerial Finance 1 (University of Waterloo)Downloaded by Tanija Singh ([email protected])lOMoARcPSD|3419660
AFM 272/273Final Exam Formula SheetsFall 2017Financial Statement Analysis:enterprise value:Enterprise value = Market Value of Equity + DebtCashgross margin and operating margin:Gross Margin =Gross ProfitSalesOperating Margin =Operating IncomeSalesreturn on equity, net profit margin, asset turnover, equity multiplier, and DuPont identity:ROE =Net IncomeBook Value of Equity=Net Profit MarginbracehtipdownleftbracehtipuprightbracehtipupleftbracehtipdownrightparenleftbiggNet IncomeSalesparenrightbigg×Asset TurnoverbracehtipdownleftbracehtipuprightbracehtipupleftbracehtipdownrightparenleftbiggSalesTotal Assetsparenrightbigg×Equity MultiplierbracehtipdownleftbracehtipuprightbracehtipupleftbracehtipdownrightparenleftbiggTotal AssetsBook Value of EquityparenrightbiggbracehtipupleftbracehtipdownrightbracehtipdownleftbracehtipuprightDuPont Identityprice-earnings ratio:P/E Ratio =Market CapitalizationNet Income=Share PriceEPSTime Value of Money:compounding and discounting with an interest rate ofrper period:to compound a cash flow fornperiods, multiply it by (1 +r)nto discount a cash flow fornperiods, divide it by (1 +r)nor multiply it by (1 +r)nPV of a stream of cash flowsC0, C1, C2, . . . , Cnoccurring at the end of period 0,1,2, . . . , nrespectively,with an interest rate ofrper period:PV0=nsummationdisplayt=0Ct(1 +r)tPV of a regular perpetuity payingCper period, discount rate ofrper period, as of one period beforethe first payment:PV0=CrPV of a regular annuity payingCper period fornperiods, discount rate ofrper period, as of oneperiod before the first payment:PV0=C×AnrwhereAnr=1rbracketleftbigg11(1 +r)nbracketrightbiggPV of a growing perpetuity, first payment ofC1, growth rate ofgper period, discount rate ofrperperiod, as of one period before the first payment:PV0=C1rg(g < r)1Downloaded by Tanija Singh ([email protected])lOMoARcPSD|3419660
PV of a growing annuity, first payment ofC1, growth rate ofgper period, discount rate ofrperperiod, as of one period before the first payment:PV0=C1rgbracketleftbigg1parenleftbigg1 +g1 +rparenrightbiggnbracketrightbigg(gnegationslash=r)IRR per period of an investment which costsPtoday and pays a single cash flownperiods from todayofF:IRR =parenleftbiggFPparenrightbigg1/n1IRR per period of an investment which costsP

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Generally Accepted Accounting Principles, Internal rate of return, Tanija Singh