Managerial Finance

FRL 300
Formula Sheet
Prepared by P. Sarmas


Income Taxable
Liability Tax
Rate Tax Average =


Cash Flow from Assets = Cash Flow to Creditors + Cash Flow to Stockholders


Operating Cash Flow Interest Paid Dividend Paid
- ANet Working Capital - Net New Borrowing - Net New Equity
- Net Capital Spending Cash Flow to Creditors Cash Flow to Stockholders
Cash Flow from Assets

EBIT Ending Net Fixed Assets
+ Depreciation - Beginning Net Fixed Assets
- Taxes + Depreciation .
Operating Cash Flow Net Capital Spending


Ending Net Working Capital (CA CL)
- Beginning Net Working Capital (CA-CL)
Change in Net Working Capital

Ending L.T. Debt Ending Equity
- Beginning L.T. Debt - Beginning Equity
Net New Borrowing - Addition to Retained Earnings
Net New Equity








b = 1 Dividend Payout Ratio




Earnings Retention Ratio =










b) * (ROA - 1
b * ROA
Rate Growth = Internal
b) * (ROE - 1
b * ROE
Rate Growth e Sustainabl =
t r
t
FVIF PV r PV
,
* ) 1 ( = + = FV
t r
t
PVIF FV
r
PV
,
*
) 1 (
=
+
=
FV
mt
m
,
r
t m
FVIF PV
m
r
PV FV
*
* ) 1 ( = + =
mt
r
t m
PVIF FV
r
FV
PV
,
*
* =
+
=
m
m
) 1 (
1
m
1 ( EAR + =
t r
e PV FV
*
* =
t r
e FV PV
*
*

=
)
r
m
t r
t
FVIFA C
r
r
C FVA
,
*
1 ) 1 (
* =
(

+
=












t r
t
PVIFA C
r r
,
*
) 1 ( *
* =
(

+
=
r
C PVA
1 1
(
r
C
PV
Perpetuity
=
) 1 ( * * ) 1 ( *
1 ) 1 (
*
,
r FVIFA C r
r
r
C FVA
t r due
t
due
+ = +
(

+
=
) 1 ( * * ) 1 ( *
) 1 ( *
1
*
,
r PVIFA C r
r r
r
C
t r due
t
due
+ = +
(

1
(
= PVA
Reminder: In the case of frequent compounding or discounting,
divide the nominal rate (APR) by m and multiply period by m.
m is number of times interest is compounded/discounted in one
period. Also, annuity interval must match the frequency (m) of
compounding or discounting.
t t
r
FV
r r
r
C Value Bond
) 1 ( ) 1 ( *
1 1
*
+
+
(

+
=


(1+R) = (1+r)*(1+h)

t t
B
B
YTM
FV
YTM YTM
YTM
C V
V
Coupon
Yield Current
FV
Coupon
Rate Coupon
) 1 ( ) 1 ( *
1 1
*
+
+
(

+
=
=
=




(

+
+
+ +
+
+
+
+
+
=
+
+
+
+
+
+
=
+
n
c
n
n
n
t
r
g r
D
r
D
r
D
r
D
r
D
P
r
D
r
D
r
D
P
) 1 (
1
*
) 1 (
.....
) 1 ( ) 1 ( ) 1 (
........
) 1 ( ) 1 ( ) 1 (
1 3
2
2
1
1
0
3
3
2
2
1
1
0

n
n
g D D
g
P
D
r
g r
D
P
r
D
P
) 1 ( *
0
0
1
1
0
0
+ =
+ =

=
=

=
+
+
=
n
t
t
t
CF
r
CF
NPV
1
0
) (
) 1 (






0 ) (
) 1 (
0
1
= +
+

=
CF
IRR
CF
n
t
t
t


0
1
) 1 (
CF
r
CF
PI
n
t
t
t

=
+
=


1 +
+ =
t
t
CF
CF Cum
t PBP


2
1
Ivestment Value Ending Investment Value Beginning
n
Income Net
ARR
n
t
t
+
=

=


n
n
t
t n
I t
n
o t
t
F
t
MIRR
r CIF
r
COF
) 1 (
) 1 ( *
) 1 (
1
+
+
=
+

=


Operating Cash Flow = (SalesVariable CostFixed CostDepreciation)(1-T) + Depreciation

Operating Cash Flow = EBIT + Depreciation Taxes

Operating Cash Flow = (Sales OC Depreciation)*(1-T) + Depreciation

Operating Cash Flow = Net Income + Depreciation

Operating Cash Flow = (Sales OC)*(1 T) + T*Depreciation

Book Value of Asset = Original Cost Accumulated Depreciation
n
Value Salvage Cost Original
on Depreciati Line Straight

=
2
365
Turnover Receivable
365
Period Receivable
Receivable Accounts Average
Sales Credit
Turnover Receivable
Turnover Inventory
365
Inventory Average
Sold Goods of Cost
End Beginning
Average
Turnover Payable
Period Payable
Payable Average
Sold Goods of Cost
Turnover Payable
Period Inventory
Turnover Inventory
+
=
=
=
=
=
=
=