# Microsoft Word - Fin303_Formula_Exam 1.docx Fin303 Formula Sheet 1 Equation Description Formula 2.1 Fisher equation i = r + ∆Pe+ r∆Pe 2.2 Fisher equation simplified i = r + ∆Pe 3.1 Balance sheet...

Microsoft Word - Fin303_Formula_Exam 1.docx

Fin303 Formula Sheet 1
Equation Description Formula
2.1 Fisher equation i = r + ∆Pe+ r∆Pe
2.2 Fisher equation simplified i = r + ∆Pe
3.1 Balance sheet identity Total assets = Total liabilities + Total stockholders’ equity
3.2 Net working capital Net working capital = Total current assets – Total current liabilities
3.3 Income Statement identity Net income = Revenues – Expenses
4.1 Current Ratio sLiabilitieCurrent
AssetsCurrent

4.2 Quick Ratio sLiabilitieCurrent
InventoryAssetsCurrent 
4.9 Total debt ratio assetsTotal
debtTotal
4.10 Debt-to-equity ratio equityTotal
debtTotal
4.11 Equity multiplier equityTotal
assetsTotal
4.15 Operating profit margin salesNet
EBIT
4.16 Net profit margin salesNet
incomeNet
4.18 Return on assets (ROA) assetsTotal
incomeNet
4.19 Return on equity (ROE) equityTotal
incomeNet
4.20 Earnings per share Net income Shares outstanding
4.21 Price-earnings ratio Price per share/Earnings per share
4.22 Market-to-book ratio shareperequityofvalueBook
shareperequityofvalueMarket
4.23 ROA turnoverassetTotalinmprofitNet arg
4.24 ROE multiplierEquityROA
Fin303 Formula Sheet 2

Name__________________________________
4.25 ROE multiplierEquityturnoverassetTotalinmprofitNet arg
4.26 ROE equityTotal
assetsTotal
assetsTotal
salesNet
salesNet
incomeNet

5.1 Future value of an n-period investment with annual compounding FVn = PV  (1 + i)n
5.2 Future value with more frequent than annual compounding FVn = PV  (1 + i/m)m  n
5.3 Future value with continuous compounding FV∞ = PV  ei  n
5.4 Present value of an n-period investment

PV  FVn
(1 i)n

5.5 Rule of 72 TDM =

72
i

6.1 Present value of an ordinary annuity PVAn = 1 ]
6.2 Future value of an ordinary annuity FVAn = ??? 1 ? ? 1
6.3 Present value of a perpetuity
CFPVP
i

6.4 Value of an annuity due
Annuity due value =
Ordinary annuity value  (1 + i)
6.5 Present value of a growing annuity 1
CF 1+PVA = 1-
( - ) 1+
n
n
g
i g i
  
  
   

6.6 Present value of a growing perpetuity 1
CFPVP
i g

6.7 Effective annual interest rate EAR = (1 + Quoted interest rate/m)m – 1