You are on page 1of 6

Managerial Finance

FRL 300
Formula Sheet
Prepared by P. Sarmas

Tax Liability
Average Tax Rate 
Taxable Income

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

Operating Cash Flow Interest Paid Dividend Paid


- Net 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
ROA * b
Internal Growth Rate 
1 - (ROA * b)

ROE * b
Sustainable Growth Rate 
1 - (ROE * b)

Earnings Retention Ratio = b = 1 – Dividend Payout Ratio

FV  PV (1  r ) t  PV * FVIFr , t

FV
PV   FV * PVIFr , t
(1  r ) t

r m *t
FV  PV (1  )  PV * FVIF r
m m
, mt

FV
PV   FV * PVIF r
r m *t , mt
(1  ) m
m

FV  PV * e r *t

PV  FV * e  r *t

r m
EAR  (1  ) 1
m
 (1  r ) t  1
FVA  C *    C * FVIFAr , t
 r 

1 1 
PVA  C *   t
 C * PVIFAr , t
 r r * (1  r ) 

C
PVPerpetuity 
r

 (1  r ) t  1
FVA  Cdue *   * (1  r )  C due * FVIFAr , t * (1  r )
 r 

1 1 
PVA  Cdue *   t
* (1  r )  C due * PVIFAr , t * (1  r )
 r r * (1  r ) 

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.

1 1  FV
Bond Value  C *    
 r r * (1  r )  (1  r )
t t
(1+R) = (1+r)*(1+h)

Coupon
Coupon Rate 
FV
Coupon
Current Yield 
VB
 1 1  FV
VB  C *   
 YTM YTM * (1  YTM )  (1  YTM )
t t

D1 D2 D3
P0     ........
(1  r )1 (1  r ) 2 (1  r ) 3
D1 D2 D3 Dn  Dn 1 1 
P0     .....    * 
(1  r )1 (1  r ) 2 (1  r ) t (1  r ) n  r  g c (1  r ) n 

D
P0 
r
D
P0  1
rg
D
r 1g
P0
Dn  D0 * (1  g ) n

n
CFt
NPV    (CF0 )
t 1 (1  r ) t
n
CFt
 (1  IRR)
t 1
t
 (CF0 )  0

n
 (1  rt)t
CF

PI  t 1
CF0

Cum CF t
PBP  t 
CF t  1

 Net Income
t 1
t

ARR  n
Beginning Value Investment  Ending Value Ivestment
2

n
COF
 CIFt * (1  rI )n  t
 (1  r t)t  t 1
(1  MIRR) n
t o F

Operating Cash Flow = (Sales–Variable Cost–Fixed Cost–Depreciation)(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

Original Cost  Salvage Value


Straight  Line Depreciation 
n
Cost of Goods Sold
Inventory Turnover 
Average Inventory

365
Inventory Period 
Inventory Turnover

Credit Sales
Receivable Turnover 
Average Accounts Receivable

365
Receivable Period 
Receivable Turnover

Cost of Goods Sold


Payable Turnover 
Average Payable

365
Payable Period 
Payable Turnover

Beginning  End
Average 
2