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    FIN10670 - Formula Sheet - Final Test

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    Sean Zhang
    The document contains formulas for calculating: 1) Present value of future cash flows and multiple cash flows using discount rates. 2) Present value of perpetuities, growing perpetuities, annuities, and growing annuities. 3) Continuous compounding and equivalent annual rate. 4) Net present value, internal rate of return, yield to maturity, and the Capital Asset Pricing Model. It also includes definitions and formulas for calculating common liquidity, leverage, turnover, profitability, and market value ratios.

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    FIN10670 - Formula Sheet - Final Test

    Uploaded by

    Sean Zhang
    10 views2 pages
    The document contains formulas for calculating: 1) Present value of future cash flows and multiple cash flows using discount rates. 2) Present value of perpetuities, growing perpetuities, annuities, and growing annuities. 3) Continuous compounding and equivalent annual rate. 4) Net present value, internal rate of return, yield to maturity, and the Capital Asset Pricing Model. It also includes definitions and formulas for calculating common liquidity, leverage, turnover, profitability, and market value ratios.

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    FIN10670_Formula Sheet_Final Test

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    The document contains formulas for calculating: 1) Present value of future cash flows and multiple cash flows using discount rates. 2) Present value of perpetuities, growing perpetuities, annuities, and growing annuities. 3) Continuous compounding and equivalent annual rate. 4) Net present value, internal rate of return, yield to maturity, and the Capital Asset Pricing Model. It also includes definitions and formulas for calculating common liquidity, leverage, turnover, profitability, and market value ratios.

    Copyright:

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

    FIN10670 - Formula Sheet - Final Test

    Uploaded by

    Sean Zhang
    The document contains formulas for calculating: 1) Present value of future cash flows and multiple cash flows using discount rates. 2) Present value of perpetuities, growing perpetuities, annuities, and growing annuities. 3) Continuous compounding and equivalent annual rate. 4) Net present value, internal rate of return, yield to maturity, and the Capital Asset Pricing Model. It also includes definitions and formulas for calculating common liquidity, leverage, turnover, profitability, and market value ratios.

    Copyright:

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

    FIN10670: Formula Sheet for Final Exam

    Lecturer: Dr. Tiffany Thng

    • Present value of a future cash flow


     
    FV C
    PV = ≡ (1)
    (1 + r)t (1 + r)t

    • Discounted multiple cash flows


    T  
    X F Vt C1 C2 CT
    PV = ≡ + + ... + (2)
    t=1
    (1 + r)t (1 + r)1 (1 + r)2 (1 + r)T

    • Present value of a perpetuity and growing perpetuity


    C C
    PV = , (3)
    r r−g
    • Present value of an annuity
    1
    " #!
    1−
     
    1 1 (1+r)t
    PV = C − ≡c (4)
    r r(1 + r)t r

    • Present value of a growing annuity


    " t #
    1 − 1+g
    PV = C 1+r
    (5)
    r−g

    • Continuous Compounding
    F VT = C0 ∗ erT (6)
    • Equivalent Annual Rate  r m
    EAR = 1 + −1 (7)
    m
    • Percentage Return on an Investment
    Capital Gains + Income
    P ercentage Return = ∗ 100 (8)
    Initial P rice P aid
    • Net Present Value/Internal Rate of Return/Yield to Maturity
    C1 C2 Ct
    N P V = C0 + + 2
    + ... + (9)
    1 + r (1 + r) (1 + r)t
    IRR or YTM = r when NPV = 0
    • Capital Asset Pricing Model (CAPM)
    E(Ri ) = rf + β[E(Rm ) − rf ] (10)
    Ratios

    Liquidity Ratios
    Current Assets
    Current Ratio = Current Liabilities

    Quick Ratio = Current Assets−Inventory


    Current Liabilities

    Cash Ratio = CashCurrent


    and Cash Equivalents
    Liabilities

    Financial Leverage Ratios


    T otal Assets−T otal Equity
    T otal Debt Ratio = T otal Assets
    T otal Debt
    Debt − Equity Ratio = T otal Equity
    T otal Assets
    Equity M ultiplier = T otal Equity
    EBIT
    T imes Interest Earned Ratio = Interest
    EBIT +Depreciation
    Cash Coverage Ratio = Interest

    Turnover Ratios
    Cost of Goods Sold
    Inventory T urnover = Inventory
    365 Days
    Days Sales in Inventory = Inventory T urnover
    Sales
    Receivables T urnover = T rade Receivables
    365 Days
    Days Sales in Receivables = Receivables T urnover
    Sales
    T otal Asset T urnover = T otal Assets

    Profitability Ratios
    N et Income
    P rof it M argin = Sales
    N et Income
    Return on Assets = T otal Assets
    Return on Equity = TNotal
    et Income
    Equity

    Market Value Ratios


    N et Income
    Earnings per Share = Shares Outstanding
    P rice per Share
    P rice − Earnings Ratio = Earnings per Share
    M arket value per Share
    M arket − to − Book Ratio = Book value per Share

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