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Formulas
Chapter 2 1. Earnings per share (e.p.s.) 2. Payout ratio (2–2)
3. P/E ratio (2–3) 4. Dividend yield (2–4) 5. (2–5)
Chapter 3
A. Profitability ratios— 1. Profit margin (3–1) 2. Return on assets (investment) (ROA)
a. b. (3–2)
3. Return on equity (ROE)
a. b. Equity multiplier c. ROA Equity multiplier (3–3)
B. Asset utilization ratios 4. Receivables turnover (3–4a ) Average collection period (3–4b )
5. Inventory turnover (3–5a ) Inventory holding per iod (3–5b )
6. a . Accounts payable turnover (3–6a ) b . Accounts payable period (3–6b )
7. Capital asset turnover (3–7) 8. Total asset turnover (3–8)
C. Liquidity ratios 9. Current ratio (3–9) 10. Quick ratio (3–10)
D. Debt Utilization Ratios 11. Debt to total assets (3–11) 12. Times interest earned (3–12)
13. Fixed charge coverage (3–13)
Chapter 4 1. RNF (S ) (S ) PS 2 (1 D) (4–1) 2. (4–2)
Chapter 5 1. CM P VC (5–1) 2. BE (5–2) 3. DOL (5–4) 4. DFL (5–6)
5. E BIT* (5–7) 6. DCL DOL DFL (5–9) 7. DCL (5–10)
8. DOL 9. DFL 10. DCL
Chapter 7 1. (7–1a ) 2. (7–1b ) 3. (7–2) 4. TC (7–3)
Chapter 8 1. (8–1) 2. Amount to be borrowed 3. RANNUAL (8–2)
4. RDIS (8–3) 5. RCOMP (8–4) 6. RCOMP (8–5)
7. RINSTALL (8–6)2 Annual number of payments I 1Total number of payments 12 P
I
P B
365
d
I
11 c 2I
P I
365
d
I
P
365
d
Amount needed11 c 2 K DIS
d %
100% d %
365
f 1date2 d 1date2SO
Q
CQ
2EOQ B
2SO
C r a1
100 P
P b365
d 1r
100 P
P
365
d
Q 1P VC2 Q 1P VC2 FC I
S TVC
S TVC FC I
EBIT
EBIT I
Q 1P VC2 Q 1P VC2 FC
S TVC
S TVC FC
CM
EBT
1S B I A S A I B2S B S A
EBIT
EBT
CM
EBIT
FC
CM
SGR
P 11 D2 a1 DT
E b
A
S 1 P
11 D
2
a1
DT
E b
L
S 1
A
S 1
Income before fixed charges and taxes
Fixed charges
Income before interest and taxes
Interest
Total debt
Total assets
Current assets Inventory
Current liabilities
Current assets
Current liabilities
Sales
Total assets
Sales
Capital assets
Accounts payable
Average daily purchases 1COGS2Cost of goods sold
Accounts payable
Inventory
Average daily COGS
Cost of goods sold
Inventoryor
Sales
Inventory
Accounts receivable
Average daily credit sales
Sales 1credit2Receivables
Total assets
Equity
Net income
Shareholders’ equity
Sales
Total assets
Net income
Sales
Net income
Total assets
Net income
Sales
Market value
Book value
MV
BV
Market value per share
Book value per share
Dividends per share
Market share price
Market share price
Earnings per share
Dividend per share
Earnings per share
Earnings available to common shareholders
Number of shares outstanding 12–12
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Chapter 9 1. FV PV(1 i )n (9–1) 2. (1 i )n 1 Effective interest rate (9–2) 3. PV FV (9–3) 4. FV A (9–4a )
5. FV A ABGN (9–4b ) 6. PV A A (9–5a ) 7. PV A ABGN (9–5b )
8. A FV A (9–6a ) 9. ABGN FV A (9–6b ) 10. A PV A (9–7a )
11. ABGN PV A (9–7b ) 12. PV (9–9) 13. PV (9–10) 14. PVn (9–11)
Chapter 10 1. (10–1) 2. P p (10–3) 3. K p (10–4) 4. P 0 (10–8)
5. K e (10–9)(11–3)(11–5) 6. (10B–1) 7. P 3 (10B–2)
Chapter 11 1. K d Y (1 T ) (11–1a ) 2. K d (11–1b ) 3. K p (11–2a ) 4. K p (11–2b ) 5. K e g (11–3)
6. (11–4) 7. K j R f j ( Rm R f ) (11–5) 8. K jn or K jn K j (11–6)
9. (11–7) 10. (11–8)
11. (11A–1) 12. K j R f j ( Rm R f ) (11A–2) 13. (11B–1)
14. K a K ea (11B–2) 15. K eL K eu ( K eu I )(D/S ) (11B–3) 16. V L V U TD (11B–4) 17. K eL K eu ( K eu I )(D/S )(1 T ) (11B–5 )
Chapter 12 1. [C pv S pv ] (12–1)
Chapter 13 1.–
D DP (13–1) 2. (13–2) 3. V (13–3) 4. (13–4) 5. (13–5)
6. (13–6) 7. (13–7) 8. (13–8)
Chapter 17 1. 1 (17–1) 2. (17–2)
3. R (17–3) 4. R (17–4)
Chapter 19 1. Face value Conversion price Conversion ratio (19–1) 3. I (M E ) N (19–3)
2. (19–2) 4. S W I (19–4)
Chapter 21 1. Forward premium (discount) (21–1)Forward Spot
Spot
12
Contract length1months2
Diluted earnings per share Adjusted aftertax earnings
Shares outstanding Shares from conversion
P e S
N
P o S
N 1
Number of directors that can be elected 1Shares owned 12 1Total number of directors to be elected 121Total number of shares outstanding2Sharesrequired
Number of directors desired Total number of shares outstanding
Total number of directorsto be elected 1
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2 x A2
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K a
K j j Rm e
Amount of lower-cost debt
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structure
Z °Size of the investmentsthat lower-cost debt
will support¢ X
Retained earnings
% of equity in
the capital structure
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P nb K j
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