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Receivables Turnover & Ratio Type

sales/Avg. Receivables **(Activity Ratio)

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Days Sales Outstanding & Ratio Type

365/Receivables Turnover **(Activity Ratio)

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Inventory Turnover & Ratio Type

COGS/Avg. Inventory **(Activity Ratio)

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Days Inventory on Hand & Ratio Type

365/Inventory Turnover **(Activity Ratio)

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Payables Turnover & Ratio Type

Purchases/Avg. Trade payables **(Activity Ratio)

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Number of Days Of Payables & Ratio Type

365/Payables Turnover ratio **(Activity Ratio)

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Total Asset turnover & Ratio Type

Revenue/Avg. Total Assets **(Activity Ratio)

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Fixed Asset Turnover & Ratio Type

Revenue/Avg Net Fixed Assets **(Activity Ratio)

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Working Capital Turnover & Ratio Type

Revenue/Avg. Working Capital **(Activity Ratio)

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Current Ratio & Ratio Type

Current Assets/Current Liabilities **(Liquidity)

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Quick Ratio & Ratio Type

(Cash + Marketable Securities+Receivables)/Current Liabilities **(Liquidity)

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Cash Ratio & Ratio Type

(Cash + Marketable Securities)/Current Liabilities **(Liquidity)

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Defensive Interval & Ratio Type

(Cash + Marketable Securities + Receivables)/Average daily Expenditures **(Liquidity)

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Cash Conversion Cycle & Ratio Type

(Days sales Outstanding) + (Days of Inventory on hand) - (Number of days of Payables) **(Liquidity)

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Debt to equity & Ratio Type

Total Debt/Total Shareholders Equity **(Solvency)

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Debt to capital & Ratio Type

total debt/(Total Debt + Shareholders equity) **(Solvency)

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Debt to assets & Ratio Type

Total debt/Total assets **(Solvency)

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Financial Leverage & Ratio Type

Average total assets/average total equity **(Solvency)

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Interest Coverage & Ratio Type

(EBIT + Lease payments)/(Interest Payments + Lease payments) **(Solvency)

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Fixed Charge Coverage & Ratio Type

(EBIT + lease Payments)/(Interest Payments + lease Payments) **(Solvency)

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Net Profit Margin & Ratio Type

Net Income/Revenue **(Profitability)

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Gross Profit Margin & Ratio Type

Gross Profit/revenue **(Profitability)

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Operating Profit Margin & Ratio Type

EBIT (or Op.Income)/revenue **(Profitability)

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Pretax Margin & Ratio Type

EBT/Revenue **(Profitability)

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ROA & Ratio Type

Net Income/Avg. total assets **(Profitability)

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Extended ROA & Ratio Type

(Net Income + Interest Expense (1-tax rate))/Average Total Assets **(Profitability)

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Operating Return on assets & Ratio Type

EBIT/Avg. Total Assets **(Profitability)

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Return on Total capital & Ratio Type

EBIT/Avg Total Capital **(Profitability)

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Return on equity & Ratio Type

Net Income/Average Total Equity **(Profitability)

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Return On Common Equity & Ratio Type

(Net Income - Preferred Dividends)Average Common Equity **(Profitability)

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FCFF

Net Income + Non Cash Charges + [Interest Expense * (1 - Tax rate)] - Fixed capital Investment - Working Capital Investment

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FCFF (short Version)

Cash Flow from Operations + [Interest Expense * (1-Tax rate)]- fixed Capital Investment

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FCFE (Free cash flow to equity)

Cash Flow From Ops - Fixed Capital Investment + Net Borrowing

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Common Size Income Statement Ratios

Statement Item/sales

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Common Size Balance Sheet Ratios

Statement Item/Total Assets

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Common Size Cash Flow ratios

Cash FLow sttement account/Revenues

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Original DuPont Equation (ROE)

(Net Profit Margin)*(Asset Turnover)(Leverage Ratio)

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Extended Dupont Equation

[Tax Burden]**[Interest Burden]**[EBIT Margin]**[Asset Turnover]**[Financial Leverage]

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Tax Burden

Net Income/EBT

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Basic EPS

(Net Income - Preferred Dividends)/Weighted Avg # shares outstanding

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Diluted EPS

([Net income-Preferred Dividends]+[Convertable Preferred Dividends]+[Convertable debt Interest (1-Tax rate)])/

([Weighted Avg Shares]+[Shares from converted Preferred Shares]+[Shares from conversion of debt]+[Shares from stock options])

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DDB Depreciation

(2/Useful Life)*(cost - Accumulated Depreciation)

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Depreciation

(Cost - Residual Value)/Useful life

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Net Increase in Common from Stock option Exercise (Quick Method)

[(Avg Market Price - Exercise Price)/Avg Mkt Price] * Shares that can be converted

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Quick check of Preferred Dilution

(Par ** Rate)/Share Conversion ***(if < basic EPS it is dilutive)

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Payback Period

(Pv of future cash flow/CF₀) or 1+(NPV/CF₀)

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WACC

(Wd)[Kd(1-t)]+(Wps)(Kps)+(Wce)(Kce)

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After tax cost of debt

Kd (1-t)

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Cost of preferred stock

Div/Price

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Three formulas for the cost of common equity

(Div/Price)+g

or

Risk free+Beta(market return-Risk free)

or

Bond yield + risk premium

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Unlevered asset beta

Beta(of equity)*(1/(1+(1-t)(d/e)))

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Project beta

Beta(of asset)*[1+[1-t)(D/E))]

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Cost of common equity with a country risk premium

Risk Free +beta(market return-risk free + country risk premium)

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Break Point (in cap structure)

amount of capital at which the components cost of capital changes/weight of the component in the capital structure

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Degree of operating leverage

%ΔEBIT/%Δsales

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Break even quantity of sales

(Fixed operating costs + fixed financing costs)/(price-variable cost per unit)

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% discount (think bonds)

(face value-Price)/Face value

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Discount basis yield

(discount)(360/days)

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Money Market Yield

((face - price)/price)(360/days)

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Bond Equivalent Yield

Holding period yield*(360/days)

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Margin call price

P₀(1-initial margin/1-Maintenance margin)

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Price weighted Index

Sum of stock Prices/Number of stocks in index (adjusted for splits)

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Market Cap weighted index

sum[(price)**(shares)]/sum[(price in base year)**(shares)] * base year index value

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Preferred Stock valuation model

Dp/Kp

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Duration

% Change in bond Price/Yield change in %

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% Price change (duration)

-Duration * (yield change in %)

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Explain duration

The percentage in price for a 1% change in yield

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Credit Spread

yield on a default free bond - Yield on a risky bond

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