List of formulas

Profit = Revenue (or sales) – Expenses

Total assets = Total liabilities + Total shareholders’ equity

Net working capital = Current assets - Current liabilities

Change in cash balance = Ending cash balance – Beginning cash balance

Simple interest for one period = Present Value (PV0) × Annual interest rate (i)

FVn (Future value using Simple Interest)  PV 1  in 

1
PV0 (Present value using Simple Interest)  FVn 
(1  in )
m n
FVn (Compound amount)  i 
 PV 1  
 m

FVn 
m n
PV0 (Present value)  i 
1  
 m 

m
EAR (effective annual rate of interest)  i 
 1    1
 m 

72 Rule n = 72/interest rate

EAR (continuous compounding)

= (e quoted rate) – 1

Rate (cost of promissory note finance)


/

Cash conversion Cycle (CCC) = Inventory Days + Accounts Receivable Days – Accounts Payable Days

Current Assets
Current Ratio

Current Assets Inventory

Quick (Acid-test) ratio

Accounts Receivable Days

(average collection period) / 365
Annual credit sales
Accounts receivable turnover

Inventory Days (Day’s sales in inventory)

/365

Inventory Turnover

Accounts Payable Days Outstanding
/365
 Total Liabilities
Debt ratio

Total Liabilities
Debt- to- Equity ratio

Operating profit EIBT

Interest coverage ratio
sales
Total Asset turnover

sales
Fixed Asset turnover
,
Gross Profit
Gross profit margin (GPM)
Net operating profit EBIT
Operating profit margin (OPM)

Net Profit
Net profit margin

Operating profit EIBT

Return on Assets (ROA)

Net Profit
Return on Equity (ROE)

Return on Equity (ROE) Net Profit sales Total Assets

 
(DuPont Analysis)
Market price per share
Price – earnings ratio

Market price per share Market price per share

Market -to- Book ratio

GDP Y C I G NX
Real GDP Real GDP
Economic Growth Rate  100
Real GDP

Nominal GDP
GDP deflator  100
Real
Number of years to double
70 / growth
(Economic growth rate and the rule of 70)
Number of unemployed
Unemployment rate  100
Labour force
Labour force
Labour force participation rate  100
Working age population
Expenditures in the current year
Consumer Price Index (CPI)  100
Expenditures in the base year
CPI CPI
Inflation rate  100
CPI
Bank Multiplier 1/
Yield guaranteed return /