BEC Formulas Flashcards
Debt to Equity Ratio
Total Liabilities / Total Equity
Times Interest Earned
Earnings Before Interest & Taxes / Interest Expense
Current Ratio
Current Assets / Current Liabilities
Quick Ratio
Cash Equivalent + AR / Current Liabilities
Cost of Retained Earnings
(FY Dividends per share / Current Market price per share) + Growth rate of Dividends per share
Weighted Average Cost of Capital
((E/V) x Re) + ((D/V) x Rd x (1-Tc))
where:
E=Market value of the firm’s equity
D=Market value of the firm’s debt
V=E+D
Re=Cost of equity
Rd=Cost of debt
Tc=Corporate tax rate
Cost of Preferred Stock
((Preferred Rate x Par value) / Market value of Preferred Stock
After Tax Cost of Debt
Pre-tax loan/bond amount x (1 - Tax rate)
Market Capitalization
(Common Stock Acct / Par Value) x Market Value per share
Total value of equity using sector P/E
Net Income x P/E multiple
Total Value of equity using Dividend Discount Model
[Current dividends x (1 + Growth rate)] / (Cost of equity - Growth rate)
Increase of Gross Receivables
(Ending AR + YE Allowance for Credit loss) - (Beginning AR + PY Allowance for Credit loss)
Net Cash Outflow
Purchase Price + Transportation Cost + Installation Cost
Asset Turnover
Sales / Assets
Profit Margin
Net Income / Sales; ROI / Asset Turnover
Cost of Credit discount
[360 / (Total pay period - Discount period)] x [Disc % / (100% - Disc %)]
Return on Assets
Net Income / total Assets
Elasticity Formula
[(FQ - CQ) / CQ] / [(FP - CP) / CP]
FQ: Future Quantity demanded
CQ: Current Quantity demanded
FP: Future Price
CP: Current Price
