)( ( ) )

FORMULAS:
(
n
PMT 1+ g
PV of growing annuity = 1− FV =PV x ( 1+r 1 ) x ( 1+ r 2 ) x … x ( 1+r N )
N CF t r −g 1+r
D ( 1+g )
P0 = 0 NPV =∑ +CF 0
r−g t =1 ( 1+ r )t R p =w A R A +w B R B . .. .
FV of growing annuity = (PMT/(r-g)) * ((1+r)^n-
(1+g)^n)) 2 2 2 2 2
σ p=(wa σ a+ wb σ b +2 ρa ,b w a wb σ a σ b)
NPV +|InitialCost|
PI = FCF0 = (S-E-D)(1-T)+D- investment in NWC –
|InitialCost| investment in gross PPE – NPV of opportunity ρi ,m σ i
t β=
D t = D 0 ( 1+ g ) costs +NSV from replaced assets σm
FCFn = (S-E-D)(1-T)+D- investment in NWC –
N CF t E( β p )=w A β A + wB β B
NPV =0=∑ t
+CF 0 investment in gross PPE +/- side effects
t=1 (1+ IRR )
TCF = NSV + Reclaimed NWC+Recovered r i =r f + β i ( E (r m )−r f )
FV t Opportunity Cost
PV t = E (P1 )−P 0 D1
( 1+ r )t FV t =PV ( 1+r )t NWC = AR + INV + Cash – AP - Accruals E ( r )= +
P0 P0

[ ]
PMT 1 NSV = MV – T x (MV-BV)
n
PV = x 1−
r ( 1+r ) N Book Value = Depreciable Basis – Accumulated ∑ Xi
Depreciation E ( X )=μ= i=1
PMT n
x ( ( 1+r ) −1 )
N
FV = FCF = EBIT*(1-T)+D - Investment in NWC – Gross
r Investment in PPE
MACRS Depreciation Schedules
EAR= 1+ (
APR m
m
−1 ) FCF = EBIT*(1-T)-Investment in NWC – Net
Investment in PPE YEAR
1
3-year
33.33%
5-year
20.00%
7-year
14.29%
TV = FCF * (1 + g) / (WACC – g) 2 44.45% 32.00% 24.49%
Enterprise value = PV of FCFs + PV of Terminal 3 14.81% 19.20% 17.49%
Value
DOL = 1 + Fixed Costs / EBITDA 4 7.41% 11.52% 12.49%
Enterprise value = MV of equity + MV of debt -
Per Share 5 11.52% 8.93%
cash
Collections = Accounts Receivable / (Sales/365) 6 5.76% 8.92%
Market capitalization = #of shares * trading price
Days Inventory Held = Inventory / (COGS/365) 7 8.93%
per share
Payables = Accounts payable / (COGS/365) 8 4.46%
PV = PMT / r
Current = Current assets / current liabilities n
PV0 = CF1 / (r-g)
Quick = (current – inventory) / current liabilities
Market to Book = Market value of equity/ Book
∑ (X i −E ( X ) )2

[ ( )]
Var ( X )=σ 2x = i=1
1
t

Coupon Face value of equity n−1

PV = ∗ 1− + Gross margin = Gross profit/sales
r ( 1+r )t
1+r Operating margin = Operating profit/sales
Net margin = Net income/sales WACC=w D r D (1−t )+w P r P+w E r E
Asset turnover = Sales / Assets