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BFIN 620 Exam 1 Formula Sheet NEW

BFIN 620 Exam 1 Formula Sheet NEW - Growth in Equity from...

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Business Finance 620 Exam 1 Formula Sheet Long-Term Debt Ratio: Long-Term Debt / (Long-Term Debt + Equity) Long-Term Debt-Equity Ratio: Long-Term Debt / Equity Total Debt Ratio: Total Liabilities / Total Assets Times Interest Earned: EBIT / Interest Payments Cash Coverage Ratio: (EBIT + Depreciation) / Interest Payments Current Ratio: Current Assets / Current Liabilities Quick Ratio: (Cash + Marketable Securities + Receivables) / Current Liabilities Cash Ratio: (Cash + Marketable Securities) / Current Liabilities Total Asset Turnover: Sales / Average Total Assets Average Collection Period: Average Receivables / Average Daily Sales Inventory Turnover: Cost Of Goods Sold (COGS) / Average Inventory Days’ Sales in Inventories: Average Inventory / Average Daily COGS Profit Margin: Net Income / Sales Operating Profit Margin: (Net Income + Interest) / Sales Return on Assets (ROA): (Net Income + Interest) / Average Total Assets Return on Equity (ROE): Net Income / Average Equity Payout Ratio: Dividends / Earnings Plowback Ratio: 1 – Payout Ratio
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Unformatted text preview: Growth in Equity from Plowback: Plowback Ratio × ROE Du Pont System: ROA = ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ + Assets Total Average Sales Sales Interest Income Net x ROE = ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ + ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ Interest Income Net Income Net Equity Average Assets Total Average x ROA x Basic PV – FV Formula: K r) (1 PV FV + = PV of Perpetuity: = r C PV of Growing Perpetuity: = g r C 1 − (r = required return; g = perpetuity growth rate) PV of Annuity: = ⎥ ⎥ ⎦ ⎤ ⎢ ⎢ ⎣ ⎡ + − n r) (1 1 r C 1 FV of Annuity: = (PV of Annuity) x ( ) n r 1 + = ( ) [ ] 1 r 1 r C n − + PV of Growing Annuity: = ⎥ ⎥ ⎦ ⎤ ⎢ ⎢ ⎣ ⎡ ⎟ ⎠ ⎞ ⎜ ⎝ ⎛ + + − − n r 1 g 1 g r C 1 FV of Growing Annuity: = ⎥ ⎥ ⎦ ⎤ ⎢ ⎢ ⎣ ⎡ − + − + g r g) (1 r) ( C n n 1 Effective Annual Rate (EAR): = K APR 1 K 1 − ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ + where K = # compounding periods per year Real Rate of Return: 1 Rate Inflation 1 Rate Nominal 1 − ⎥ ⎦ ⎤ ⎢ ⎣ ⎡ + + =...
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