Managerial Fin 2

Managerial Finance FRL 301

Formula Sheet Prepared by P. Sarmas n

NPV = ∑ t =1

n

CFt + (CF0 ) (1 + r ) t

CFt

∑ (1 + IRR) t =1

PBP = t + n

PI =

t

+ (CF0 ) = 0

Last Negative Cum. CF CFt +1 CFt

∑ (1 + r ) t =1

t

CF0 n

∑ Net Income t =1

ARR =

n Beginning Value Investment + Ending Value Ivestment 2 n

n

t

COFt = ∑ t t = o (1 + r )

∑ CIF * (1 + r ) t =1

n −t

t

(1 + MIRR) n

Operating Cash Flow = (Sales–Variable Cost–Fixed Cost–Depreciation)(1-T) + Depreciation Operating Cash Flow = EBIT + Depreciation – Taxes Operating Cash Flow = (Sales – OC – Depreciation)*(1-T) + Depreciation Operating Cash Flow = Net Income + Depreciation Operating Cash Flow = (Sales – OC)*(1 – T) + T*Depreciation Book Value of Asset = Original Cost – Accumulated Depreciation

Straight − Line Depreciation =

Original Cost − Salvage Value n

VC = Q*v TC = VC + FC NI = (S – FC – VC – D)*(1-T) FC + OCF P−v FC + D Q Accounting BEP = P−v FC QCash BEP = P−v FC + OCF * QFinancial BEP = P−v FC DOL = 1 + OCF Q general =

Q( P − v) Q ( P − v) − FC Q ( P − v) − FC EBIT = DFL = Q ( P − v) − FC − Int EBIT − Int Q( P − v) DTL = DCL = DOL * DFL = Q ( P − v) − FC − Int DOL =

Capital Gain Yield =

Pt +1 − Pt Pt

D t + Pt − Pt −1 R = Pt −1

⎡1 ⎤ 1 FV Pt = C ⎢ − + t ⎥ t r + r ( 1 r ) ( 1 + r ) ⎣ ⎦ T

−

R=

∑R t =1

t

T

VAR( R ) =

− − − 1 ⎡ ⎤ 2 2 − + − + + − ( ) ( ) ......... ( )2 ⎥ R R R R R R T 1 2 ⎢ T −1 ⎣ ⎦

Standard Deviation or SD(R) = VAR(R)

n

E ( R) = ∑ Pr .s * Rs s =1

n

σ 2 = ∑ Pr .s * [ Rs − E ( R)]2 s =1

n

∑ Pr * [ R

σ= σ = 2

s =1

s

s

− E ( R)]2

E(Rp) = WA*E(RA) + WB*E(RB) R = E(R) + U n

β p = ∑W j * β j j =1

W A + WB + ..... + W N = 1

E(RA) = Rf + [E(RM) – Rf]*βA Slope =

E(R j ) − R f

βj

RE =

D * (1 + g ) D1 +g= 0 +g P0 P0

R E = R f + β E * ( RM − R f ) RP =

D P0

⎛D⎞ ⎛P⎞ ⎛E⎞ WACC = ⎜ ⎟ * RE + ⎜ ⎟ * R P + ⎜ ⎟ * RD * (1 − t c ) ⎝V ⎠ ⎝V ⎠ ⎝V ⎠ V = E+P+D

WACC = WE*RE + WP*RP + WD*RD*(1-tc) WE + WP + WD = 1

YTM approximate =

FV − P0 n FV + 2 P0 3

Coupon +

EPS =

(Revenue - Total Variable Costs - Fixed Costs - Interest) * (1 - t) ( EBIT − Interest ) * (1 − t ) = Number of Shares Outstanding Number of Shares Outstanding

ROE =

(Revenue - Total Variable Costs - Fixed Costs - Interest) * (1 - t) ( EBIT − Interest ) * (1 − t ) = Equity Equity

Vu =

EBIT (1 − T ) Ru

Vl =

( EBIT − Int )(1 − T ) WACC

V L = VU V L = VU + Tc * D RE = R A + (R A − RD ) * D / E

DPO = Dividend ÷ Net Income Dividend Yield = Dividend per share ÷ Price per share Modified Accelerated Cost Recovery System

Year 1 2 3 4 5 6 7 8

Property Class 3-Year 5-Year 33.33% 20.00% 44.44% 32.00% 14.82% 19.20% 7.41% 11.52% 11.52% 5.76%

7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45%