Formula sheet

BOND

Bond Value : B = PV(annuity) + PV(lump sum)

STOCK VALUE

Gordon growth model/Constant Growth model

Variable Growth Model

YTM formula

Annual Interest Payment + (Par Value - Current Bond Price)/Number of Years until Maturity

(Par Value + Current Bond Price)/2 

= Approximate Yield-to-Maturity Yield Percentage

TIME VALUE OF MONEY

FVt = PV(1+i/m)mn

FVt = PV(FVIFi%,t)

PVt = FV(PVIFi%,t)

FVA = PMT (FVIFA i, t )

FVA = PMT X (1 + i/m)mn - 1
i/m
PVA = PMT (PVIFA i, t )
_ 1__
PVA = PMT * 1 - (1 + i/m)mn
i/m

Present Value of a Perpetuity

PVA = PMT
I

Future Value – annuitydue

FVAD = PMT X (1 + i/m)mn – 1 * (1+i/m)
i/m
FVAD = PMT (FVIFA i, t )* (1+i)

Present Value – annuitydue

PVA = PMT (PVIFA i, t ) * (1+i)

_ 1__
PVAD = PMT * 1 - (1 + i/m)mn * (1+i/m)
i/m

EAR = ( 1 + quoted rate ) m - 1

m
Present Value of a Perpetuity

PVA = PMT

Cost of capital

Kd = kd (1 - T)
kp = D / NPo

re=D1 +g
   P0 (1-F)

Capital Budgeting

NPV = PV of all cash inflows – PV of all cash outflows

IRR = Lowest Discount Rate + [NPV at Lower rate * (Higher Rate - Lower Rate) / (NPV at Lower Rate - NPV at
Higher Rate)]

LIQUIDITY RATIOS

1. Current Ratio = Current Asset / Current Liability (x or %) 

2. Quick Ratio = (Current Asset - Inventory) / Current Liability (x or %)
ACTIVITY RATIOS

1. Inventory Turnover Ratio = Sales / Inventory (x)

2. Inventory Turnover Period = 360 / Inventory Turnover Ratio (day or Inv / Daily Sales)
3. Daily Sales = sales / 360 ($/day)
4. Receivable Turnover Ratio = Sales / Receivables
5. Daily Sales Outstanding = Accounts Receivable / Daily sales (day)
6. Daily Sales Outstanding = 360 / (Sales / Receivables) = Receivables / Daily Sales (day)
7. Daily Sales Outstanding = 360 / Receivables Turnover Ratio (day)
8. Fixed Asset Turnover Ratio = Sales / Avg Fixed Asset (x)
9. Fixed Asset Turnover Period = 360 / Fixed Asset Turnover Ratio (day or Avg. FA / DS)
10. Total Asset Turnover Ratio = Sales / Avg Total Asset (x)
11. Total Asset Turnover Ratio = Sales / Average TA (x or %)
12. Inventory Turnover Ratio = COGS / Avg Inventory (x or %)
13. Days Sales in Inventory or Inventory Turnover Period = Average Inventory / Daily
COGS (days)
Debt Ratio:

1. Debt Ratio = Total Debt / Total Asset (x or %)

2. Debt Equity Ratio = Long Term Debt / Total Equity (x or %)
 3. Debt Equity Ratio = Total Liability / Total Equity (x or %)

Profitability Ratio

1. Profit Margin = Net Income / Sales (x or %)

2. Return on Asset = Net Income / Total Asset (x or %)

3. Return on Asset = (Net Income+ Interest) / (Debt+Equity)
4. Return on Asset = (Net Income+ Interest) / Total Assets
5. Return On Equity = Net Income / Total Equity (x or %)
6. Payout Ratio (POR) = Dividend / Earning (%)

1. Earning Per Share = Net Income / Shares Outstanding ($/share)

2. Price = Price per Share (Tk/share)
3. Book Value per Share (BVPS) = Total Equity / SOS ($/share)
4. Market / Book = Market Price / BVPS (x or %)
5. Market Value = Price * SOS ($)
6. Book Value = Total Equity ($)
7. Price / Earning Ratio = market price per share / EPS (x)

RISK AND RETURN T

∑ ( R i− R̄ ) 2
VAR ( R)= σ 2= i=1
T −1

 yearly return
Historical Average Return  i1

T
CAPM

rj = RF + [bj ´ (rm – RF)]