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Finance Test 1 Formula Sheet
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Dr. Hubbard's Finance 1 Formula Sheet Test 1, Trinity University Spring 2012
Key Concepts:
Terms in this set (50)
Current ratio
Current assets/Current liabilities
Quick Ratio
(Current assets - inventories)/Current liabilities
Inventory Turnover
Cost of sales/Inventories
Average Collection Period
Accounts receivable/(Credit sales/365)
fixed asset turnover
Sales/Net fixed assets
Total Asset Turnover
Sales/Total assets
Total Debt Ratio
Total debt/Total assets
debt to equity
Total debt/Total equity
Times Interest Earned
EBIT/I
Fixed Charge coverage
(EBIT + L)/(I + L)
Gross Profit Margin
(Sales - Cost of sales)/Sales
Net Profit Margin
EAT/Sales
Return on Investment
EAT/Total Assets
Payout Ratio
Dividend per share/Earnings per share
Dividend Yield
Expected dividend per share/Stock price
Return on Equity
EAT/Equity
Equity Multiplier
Assets/Equity
additional funding needed
AFN = [(A/S)(changeS) - (SCL/S)(changeS)] - [EAT - D]
holding period return (percentage)
HPR = rj = [(P1 - P0) + D1] / P0
future value of various compounding periods
FVn = PV0 (1 + i/m)^nm
future value of an ordinary annuity
FVANn = PMT x [(1 + i)^n - 1]/ i
present value of a single payment
PV0 = FVn/(1 + i)^n
effective interest rate
ER = (1 + i/m)^m - 1
Present value of an ordinary annuity
PVAN = PMT x {1 - [1/(1+i)^n]}/i
future value of annuity due
FVAND = FVAN(1+i)
present value of annuity due
PVAND = PVAN(1+i)
payment of present value of ordinary annuity
PMT = PVAN/({1- [1/(1+i)^n]}/i)
.payment of future value of ordinary annuity
PMT = FVAN/{[(1+i)^n - 1]/i}
strength
higher than industry current ratio
weakness
lower than industry current ratio
strength
higher than industry quick ratio
weakness
lower than industry quick ratio
strength
higher than industry gross profit margin
weakness
lower than industry gross profit margin
strength
lower than industry average collection period
weakness
higher than industry average collection period
strength
higher than industry average inventory turnover
weakness
lower than industry average inventory turnover
strength
higher than industry average total asset turnover
weakness
lower than industry average total asset turnover
strength
lower than industry average total debt ratio
weakness
higher than industry average total debt ratio
strength
higher than industry average times interest earned
weakness
lower than industry average times interest earned
strength
higher than industry average net profit margin
weakness
lower than industry average net profit margin
strength
higher than industry average return on investment
weakness
lower than industry average return on investment
ONLY accounts payable and accrued wages and taxes
what is included in the SCL of the AFN equation?
increase by percentage change; AFN; EAT
In a pro forma balance sheet, what are the three things you should do?
1). everything x __________
2). notes payable + ________
3). stockholder's equity + ________
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