Ros69760 formulasheet 001-007

[Pages:7]Fundamentals of Corporate Finance

Seventh Canadian Edition by Ross, Westerfield, Jordan, and Roberts

Formula Sheet

Assets 5 Liabilities 1 Shareholders' equity Revenues 2 Expenses 5 Income Cash flow from assets 5 Cash flow to bondholders 1 Cash flow to shareholders Current ratio 5 Current assets/Current liabilities

Current assets 2 Inventory Quick ratio 5

Current liabilities Cash ratio 5 Cash 1 Cash equivalents/Current liabilities Net working capital to total assets 5 Net working capital/Total assets Interval measure 5 Current assets/Average daily operating costs Total debt ratio 5 [Total assets 2 Total equity]/Total assets Debt/equity ratio 5 Total debt/Total equity Equity multiplier 5 Total assets/Total equity

Long-term debt Long-term debt ratio 5 Long-term debt 1 Total equity Times interest earned ratio 5 EBIT/Interest Cash coverage ratio 5 [EBIT 1 Depreciation]/Interest Inventory turnover 5 Cost of goods sold/Inventory Days' sales in inventory 5 365 days/Inventory turnover Receivables turnover 5 Sales/Accounts receivable Days' sales in receivables 5 365 days/Receivables turnover NWC turnover 5 Sales/NWC Fixed asset turnover 5 Sales/Net fixed assets Total asset turnover 5 Sales/Total assets Profit margin 5 Net income/Sales Return on assets 5 Net income/Total assets Return on equity 5 Net income/Total equity P/E ratio 5 Price per share/Earnings per share Market-to-book ratio 5 Market value per share/Book value per share ROE 5 Net income/Sales 3 Sales/Assets 3 Assets/Equity

5 Profit margin 3 Total asset turnover 3 Equity multiplier

[2.1] [2.2] [2.3] [3.1]

[3.2]

[3.3] [3.4] [3.5] [3.6] [3.7] [3.8]

[3.9]

[3.10] [3.11] [3.12] [3.13] [3.14] [3.15] [3.16] [3.17] [3.18] [3.19] [3.20] [3.21] [3.22] [3.23] [3.24]

page # 26 30 32 64

66

66 66 66 67 67 67

67

68 68 68 68 69 69 70 70 70 70 71 71 72 72 74

2

Formula Sheet

Dividend payout ratio 5 Cash dividends/Net income

EFN 5 Increase in total assets 2 Addition to retained earnings 5 A1g2 2 p1S2R 3 11 1 g2

EFN 5 2p(S)R 1 [A 2 p(S)R] 3 g

EFN 5 2p(S)R 1 [A 2 p(S)R] 3 g g 5 pS(R)/[A 2 pS(R)]

ROA 3 R Internal growth rate 5 1 2 ROA 3 R EFN* 5 Increase in total assets 2 Addition to retained earnings

2 New borrowing 5 A(g) 2 p(S)R 3 (1 1 g) 2 pS(R) 3 (1 1 g)[D/E] EFN* 5 0

g* 5 ROE 3 R/[1 2 ROE 3 R]

p1S/A2 11 1 D/E2 3 R g* 5 1 2 p1S/A2 11 1 D/E2 3 R

Future value 5 $1 3 (1 1 r)t

PV 5 $1 3 [1/(1 1 r)t] 5 $1/(1 1 r)t

PV 3 (1 1 r)t 5 FVt PV 5 FVt/(1 1 r)t 5 FVt 3 [1/(1 1 r)t]

Annuity

present

value

5

C

3

a

1

2

Present value r

factor

b

1 2 1/ 11 1 r2t

5C3 e

r

f

Annuity FV factor 5 1Future value factor 2 12/r 5 111 1 r2t 2 12/r

Annuity due value 5 Ordinary annuity value 3 (1 1 r)

Perpetuity present value 3 Rate 5 Cash flow PV 3 r 5 C

Annuity present value factor 5 11 2 Present value factor2/r 5 11/r2 3 11 2 Present value factor2

C PV 5 r 2 g

PV

5

r

C 2

g

c

1

2

1 a

1

1 1

gt bd r

EAR 5 [1 1 (Quoted rate/m)]m 2 1

EAR 5 eq 2 1

Bond value 5 C 3 (1 2 1/(1 1 r)t)/r 1 F/(1 1 r)t

1 1 R 5 (1 1 r) 3 (1 1 h)

1 1 R 5 (1 1 r) 3 (1 1 h) R 5 r 1 h 1 r 3 h

R ................
................

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