Professional Documents
Culture Documents
NOWC = Net operating working capital = Operating current assets - Operating current liabilities
Total net operating capital = Net operating working capital + Operating long-term assets
NOPAT = Net operating profit after taxes = EBIT(l - Tax rate)
Free cash flow (FCF) = NOPAT - Net investment in operating capital
NOPAT
Return on invested capital (ROIC) =
. capita
Tota1 net operating • 1
MVA = Market value of stock - Equity capital supplied by shareholders
EVA= Net operating profit after taxes (NOPAT) - (Total net operating capital) (WACC)
Current assets
Current ratio=---- - - Total assets
Current liabilities Equity multiplier= .
Common eqmty
Current assets - Inventories
Quick, or acid test, ratio=
1.
Current 1.iab.1 1hes
. EBIT
Times-interest-earned (TIE) ratio=
Cost of goods sold Interest c11arges
Inventory turnover ratio= ---- --
Inventories EBITDA + Lease payments
EBITDA coverage ratio=
Receivables Interest + Principal payments + Lease payments
DSO = Days sales outstanding=
Average sa1es per day
Net income available to common shareholders
Payables Net profit margin=
APP= Average payables period= . Sa1es
Annua1 operating costs1365
Net income available to common shareholders
Return on tota1 assets (R0A) =
Sales Tota1 assets
Fixed assets turnover ratio=
Net f.1xed assets EBIT
Basic earning power (BEP) ratio=
Tota1 assets
Sales
Total assets turnover ratio= ROA= Profit margin X Total assets turnover
Tota1 assets
Total debt Net income Sales
Debt ratio= ---- R 0A=----- X -- - - -
Total assets Sales Total assets
[1 - 1. l
1 1 (1 + I)N Vzerocouponbond
PVAN = PMT [
I - I(l + I)N ] = PMT
I rd = r* + IP + DRP + LP+MRP
PVAN due = PVA ordinaril + I) rRF = r*+IP
rd = rRF+DRP+LP+MRP
PMT
PV of a perpetuity = --
1 n
Expected rate of return r �
i =l pli
= =
N CFt
PVUnevenstrearn =; +
(1
1 �rt
t=l
Historical average, rAvg
FVunevenstrearn = L
t l
=
CFt(l + I) N -t
n
n
Number of periods = NM
1NOM MN
FVN = PV(l + I�)Number of periods = Pv(1 + )
M Historical estimated u = S =
n-1
IN M M
EFF% = (1 + � ) - 1.0
a
CV =
r
hp= � wibi
i =l
ap -�(r pi - rp) pi
= 2
Required return on stock marke
t = rM 1=1