Exam1formulaesheet-1

Exam1formulaesheet-1 - Current ratio (CR) = Current assets...

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BUSINESS FINANCE SPRING 2008 EXAM 1 FORMULAE SHEET Chapter 2: You may bring manual for your financial calculator. Chapter 3: BALANCE SHEET: Assets = Liabilities + Equity INCOME STATEMENT: Sales – Operating expense excluding depreciation – Depreciation – Interest – Tax = Net Income FREE CASH FLOW 2006 2007 OPERATING CASH FLOW [OCF = EBIT(1-Tax Rate)] Operating Current Assets (OCA = CA) Operating Current Liabilities (OCL = CL – Notes payable) Net Fixed Assets (NFA) Operating Capital (OCF – OCL + NFA) INCREASE IN OPERATING CAPITAL FREE CASH FLOW Chapter 4: Ratios Operating profit margin = EBIT / Sales Profit margin (PM) = Net Income / Sales Basic Earning Power (BEP) = EBIT / Total Assets Return on Assets (ROA) = Net Income / Total Assets Return on Equity (ROE) = Net Income / Total Equity
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Unformatted text preview: Current ratio (CR) = Current assets / Current liabilities Quick ratio (QR) = (Current assets inventories) / Current liabilities Inventory turnover = Sales / Inventories Fixed assets turnover = Sales / Net Fixed Assets Total assets turnover = Sales / Total assets Debt ratio = Total liabilities / Total assets Equity multiplier = Total assets / Total equity Times-Interest-Earned (TIE) = EBIT/Interest Price-to-earnings (PE) = Price per share / Earnings per share Earnings Per Share = Net Income / No. of shares Market-to-Book (MB) = Price per share / Book value per share Book value per share = Total equity / No. of shares DuPont System = PM * TA turnover * EM Where, Profit Margin = Net Income / Sales Total assets turnover = Sales / Total assets Equity Multiplier = Total assets / Total equity...
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