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    List of Formulas Used in Different Financial Calculations

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    Raja Muaz Ahmad Khan
    This document lists formulas used in different financial calculations taught in lessons 1 through 22. These include formulas to calculate balance sheets, working capital, ratios like current ratio and quick ratio, turnover ratios, rates of return, valuation ratios like price-earnings ratio and book value, time value of money calculations, and other accounting formulas. In total, over 20 common financial metrics and calculations are defined through mathematical formulas in this reference sheet for financial lessons.

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    List of Formulas Used in Different Financial Calculations

    Uploaded by

    Raja Muaz Ahmad Khan
    285 views2 pages
    This document lists formulas used in different financial calculations taught in lessons 1 through 22. These include formulas to calculate balance sheets, working capital, ratios like current ratio and quick ratio, turnover ratios, rates of return, valuation ratios like price-earnings ratio and book value, time value of money calculations, and other accounting formulas. In total, over 20 common financial metrics and calculations are defined through mathematical formulas in this reference sheet for financial lessons.

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    This document lists formulas used in different financial calculations taught in lessons 1 through 22. These include formulas to calculate balance sheets, working capital, ratios like current ratio and quick ratio, turnover ratios, rates of return, valuation ratios like price-earnings ratio and book value, time value of money calculations, and other accounting formulas. In total, over 20 common financial metrics and calculations are defined through mathematical formulas in this reference sheet for financial lessons.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    285 views2 pages

    List of Formulas Used in Different Financial Calculations

    Uploaded by

    Raja Muaz Ahmad Khan
    This document lists formulas used in different financial calculations taught in lessons 1 through 22. These include formulas to calculate balance sheets, working capital, ratios like current ratio and quick ratio, turnover ratios, rates of return, valuation ratios like price-earnings ratio and book value, time value of money calculations, and other accounting formulas. In total, over 20 common financial metrics and calculations are defined through mathematical formulas in this reference sheet for financial lessons.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    List of formulas used in Different Financial Calculations

    (From Lesson #1 to 22)

    Balance Sheet Identity Assets ≡ Liabilities + Stockholder’s Equity


    Gross Working Capital Total current assets
    Net Working Capital Current assets – Current liabilities
    Current Ratio Current assets / Current liabilities
    Quick Ratio Current assets – Inventory / Current liabilities
    Cash Ratio Cash / Current Liabilities
    Total Debt Ratio Total Assets -Total Equity / Total Assets
    Debt–Equity ratio Total Debt / Total Equity
    Equity Multiplier Total Assets / Total Equity or 1 + Debt-Equity ratio
    Interest Coverage Ratio EBIT /Interest
    Cash Coverage Ratio EBIT + Depreciation / Interest
    Inventory turnover Ratio Cost of Goods Sold / Inventory
    Day’s sales in Inventory 365 days / Inventory Turnover
    Receivables turnover Sales / Accounts Receivables
    Day’s Sales in Receivables 365 days / Receivable Turnover
    Payables Turnover Cost of Goods Sold / Accounts payables
    Total Assets turnover Sales / Total Assets
    Capital Intensity Ratio Total Assets / Sales
    Profit Margin Ratio Net Income / Sales
    Return on Assets Net Income / Total Assets
    Return on Equity Net Income / Total Equity
    Earning Per Share Net Income / Shares Outstanding
    Price-Earning Ratio Price Per Share / Earnings per share
    Book Value Total equity / No.of shares outstanding
    Mark-to-Book Ratio Market value per share / Book value per share
    The du-pont identity ROE = Profit Margin × Total Assets Turnover × Equity Multiplier
    Dividend Payout ratio Cash Dividends / Net Income
    Retention ratio Retained Earnings / Net Income
    Internal Growth Rate (ROA × ƅ) / (1- (ROA×ƅ)
    Sustainable Growth Rate (ROE × ƅ) / (1- (ROE×ƅ)
    Simple interest rate Pxrxt
    Compound interest rate P x r^t
    Future value PV×(1 + r)^t
    Present value FV × (1+r) ^t
    Present value of annuity C × {1- 1 / (1+r)^t }/r
    Future value of annuity C × (1+r)^t- 1) / r
    Annuity Due Ordinary annuity value x (1 + r)
    Present value of perpetuity PV = C / r
    Effective annual interest rate (1 + Quoted rate / m)m – 1
    Present Value of Bond C × {1- 1/ (1+r) ^t}/r + F/ (1+r) ^t
    Fisher Equation 1 + R = (1 + r) x (1 + h)

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