Sample Income Statement 1-9 2-9 Note ...

Sample Income Statement

1-9 2-9

Note: Sample ONLY to show the format. Numbers here

have nothing to do with the questions on the test.

Don't use these numbers to solve the questions!

9

Sample Balance Sheet

1-5 2-5

Note: Sample ONLY to show the format. Numbers here

have nothing to do with the questions on the test.

Don't use these numbers to solve the questions!

5

Total Debt = Total Assets - Total Equity Total Debt= Current Liabilities + Long term debt Total Equity = Total Assets - Total Debt

Average Collection Period = Days sales in receivables Fixed Asset Turnover= Sales / Net Fixed Assets

Book value per share = = Owners' Equity / Shares Outstanding

Market value per share= stock price=price per share Earnings per share =

= Net Income / Shares Outstanding

Dividend payout ratio = = Cash dividends / Net income

Retention ratio = b = = 1 ? Dividend Payout Ratio

OR Retention ratio=b = = (Net Income-Total Dividends) / Net Income =(EPS ? DPS) / EPS

Working Capital = Current Assets NWC=Net Working Capital= Current Assets - Current Liabilities Net New Borrowing = Ending LT debt ? Beginning LT debt Net New Equity=Amount of New Equity Raised=

= Ending Common Stock and Paid in Surplus - Beginning Common Stock and Paid in Surplus

? EAR = [1 + (APR / m)]m- 1 ? PV = FV / (1 + r)t ? FV = PV (1 + r)t ? r = (FV / PV)1/t ? 1

? t = ln(FV / PV) / ln(1 + r)

[ ] APV

=

C

?

1 - [1/((1 +

r)t )]

r

[ ] APV

=

C

?

1 - [1/((1 +

r)t )]

? (1 +

r)

r

[ ] FVA

=

C

?

( (1

+

r

)t

)

-1

r

[ ] FVA

=

C

?

((1

+

r

)t

)

-

1

?

(1

+

r)

r

APV ? r

( ) C = 1- [1/((1+ r)t )]

? Current yield = Annual coupon payment / bond's market price

B

=

C

?

(1

-

[1 /((1 r

+

r)t

)])

+

((1

F +r

)t

)

P0

=

D1 (1 + R)1

+

D2 (1 + R) 2

+ ... +

D n-1 (1 + R) n-1

+

Dn (1 + R) n

+

Pn (1 + R) n

Dt +1 = Dt (1 + g t +1 )

Pt

=

D t (1 + g) R-g

=

D t+1 R-g

R = D 0 (1 + g) + g = D1 + g

P0

P0

Dt = D0 (1 + g ) t

R = [ D1 / P0 ] + [ [P1 - P0 ] / P0 ]

NPV

=

n t=0

CF t (1+ R

) t

n

CF t

t=0 ( 1 + IRR

) t

=0

PI = Present va lue of future cash flows / initial investment

Estimation of Net Cash Flows from a project: Equipment purchase (cost) at the beginning Change in NWC Sales increase Operating costs Depreciation Earnings before taxes (EBT) Taxes Earnings after taxes Add back Depreciation Operating cash flow Recovery of NWC at the end of the project Equipment sale at the end of the project Tax on gain from eq. sale at the end of the project Net CFs

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