Financial Management Formulas

capital budgeting ARR payback profitablity profitablity cash inflow formula avg PAT/avg investment PAT/initial investment profit(life-payback period PAT+depriciation payback period original investment/PAT+depriciation discounting p=(1-i)n leverages earning per share profit after tax/ no of shares ratio analysis formulas bank finance to working capital ratio = short term bank borrowings /working capital intrest coverage ratio ebit/ intrest current ratio current assets/current liablities acid test ratio quick ratio/ current liblities quick assets current assets- inventories debt/equity ratio debt/equity equity net worth + prefrence capital debt service coverage ratio inventory turn over ratio avg inventory avg collection period fixed asset turnover ratio total asset turn over ratio gross profit margin ratio return on equity equity earnings price earning ratio earninr per share leverages operating leverage financial leverage wc cash t.o min cash req ratio inventory management eoq no of orders re order level max level min level danger level avg rate of consum cogs/ avg inventory ope. Inven.+clo. Inven./2 avg account receviables/avg daily credit sales,net sales net sales/ avg net fixed asset net sales/avg total assets gross profit / net sales equity earnings/ avg net worth pat- preferance dividend market price per share/ earning per share pat/no of shares formulas c/ebit ebit/earning after int. current assets- current liablities no of days in year/cash cycle annual cash req/ cash t.o formulas 2ab/cs annual demand/eoq max usage*max reodering price rol+reodering quantity-minrate of consum*minreorder period rol-avg rate of cons*avg reorder period avg consum/lead time for emergency min+max/2 pat+dep+non cash charges+intrest on term loans/intrest on term lons +

gap loans/intrest on term lons +repayment of term loans les,net sales inreorder period