Formulas
Finance 311 with Booth at Michigan State University
About this deck
By: Joe Leger
Created: 2012-01-22
Size: 38 flashcards
Views: 15
Created: 2012-01-22
Size: 38 flashcards
Views: 15
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy
Sign up (free) to study this.
Common Equity
Assets - Liabilities - Preferred Stock
Net Working Capital
Current Assets - Current Liabilities
Operating Cash Flow
EBIT +Depreciation - Taxes
Cash Flow from Assets (CFa)
Operating Cash Flow - Change in Fixed Assets - Change in Net Working Capital
OR
Cash Flow to Bondholders
Cash Flow to Creditors (CFb) + Cash Flow to Stockholders (CFs)
Change in Fixed Assets (Net Capital Spending)
Ending Fixed Assets - Beginning Fixed Assets + Depreciation
CF to Stockholders
Dividends Paid - Net New Equity
Cost of Goods Sold (COGS)
Revenue - Depreciation - EBIT (Operating Income)
Current Ratio
Total Current Assets
Total Curent Liabilities
should be around 2
Quick Ratio
Quick Assets (Total CA - Inventory)
Total Current Liabilities
should be around 1
Total Asset Turnover
Total Operating Revenues
Total Assets
should be at least 1
Receivables Turnover (use with avg. collection period)
Total Operating Revenues
Receivables
Average Collection Period
Days in Period
Receivables Turnover
Inventory Turnover
Cost of Goods Sold
Inventory
Days in Inventory
Days in Period
Inventory Turnover
Debt Ratio
Total Debt
Total Assets
generally want to be less than .4
Equity Multiplier
Total Assets
Total Equity
approximately Debt-to-Equity + 1
Times Interest Earned (TIE)
Earnings Before Interest and Taxes
Interest Expense
Line of Death = anything below 6 should be extremely alarming (80% of companies below line fail within 2 years)
Cash Coverage
EBIT + Depreciation
Interest
EBITD = basic measure of the firms ability to generate cash
Net Profit Margin
Net Income
Total Operating Revenue
Net Return on Assets
Net Income
Total Assets
ending percentage needs to be compared to peers
Return On Assets (ROA)* Partial Dupont
Profit Margin * Asset Turnover
OR
Net Income * Total Operating Revenue
Total Operating Revenue Total Assets
- Can increase ROA by increasing profit margin or increasing asset turnover
Debt-to-Equity Ratio
Total Debt
Total Equity
Return on Equity (ROE)
Net Income
Stockholders' Equity
great summary ratio
ROE (Full Dupont)
Profit Margin * Asset Turnover * Equity Multiplier
OR
Net Income * Total Operating Revenue * Total Assets
Total Operating Revenue Total Assets Stockholders' Equity
Payout Ratio
Cash Dividends
Net Income
Retention Ratio*
Retained Earnings
Net Income
fuels future growth
Retained Earnings
Net Income - Dividends
Price-to-Earnings (P/E) Ratio
Market Price Per Share
Earnings Per Share
EPS = Net Income / Number of Shares Outstanding
Earnings Per Share
Net Income
# of Shares Outstanding
Dividend Yield
Dividend Per Share
Market Price Per share
Market-to-Book (M/B) or Price-to-Book (P/B) Ratio
Price Per Share
Book Value Per Share
- low ratios can result in a good buy
Economic Value Added (EVA)
EBIT (1 - Tax Rate) - (Total Capital) (After-Tax Cost of Capital)
- the higher the better
Dividend Payout
Cash Dividends
Net Income
Retention Ratio (Plowback)
Addition to Retained Earnings
Net Income
EFN
pg. 63
Fixed Asset Utilization
Fixed Assets
Sales
Internal Growth Rate (IGR)
ROA x b
1-ROA x b
Sustainable Growth Rate (SGR)
ROE x b
1 - ROE x b
About this deck
By: Joe Leger
Created: 2012-01-22
Size: 38 flashcards
Views: 15
Created: 2012-01-22
Size: 38 flashcards
Views: 15
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy