Calculations Flashcards
Bond Interest Yield?
coupon/clean price x 100
Bond Redemption Yield?
Interest yield +/-
(Gain/loss to maturity/number of years to
maturity)
Divided by
Clean Price x 100
Rental Yield?
annual rent - expenses/market price + costs of purchases x 100
CAPM?
E(Ri) = Rf + Bi (Rm -Rf)
Holding Period Return?
D+V1-V0
Divided by
V0
Money-Weighted rate of return?
D+V1-V0-C
Divided by
V0+ (C x n/12)
Sharpe Ratio?
Return - risk free return/Standard Deviation
Alpha
actual return - [Rf + Bi (Rm - Rf)]
Information ratio
Rp - Rb / Tracking error
Accumulating Capital Sum
FV = PV/(1+r)n
Present value of a future sum
PV = FV/(1+r)n
APR/AER/EAR
(1+ r/n)n - 1
Accumulating regular savings
FV = P {(1+r)n-1/r}
Discounting regular savings
A = P{1-(1+r)-n/r}
Annual depreciation
Original cost - expected residual value/expected useful life x 100
Operating Margin
Operating profit/sales
Net Margin
Net profit after taxation/sales
Return on Equity (ROE)
Net Profit after tax & after preference share dividends / Capital & Reserves (shareholder funds)
Return on Capital Employed (ROCE)
Profit before tax & interest / capital employed
Gearing
Long term loans + preference shares/total equity - preference shares
x 100
Interest cover
Profit before interest & tax/gross interest payable
Working capital ‘current’ ratio
current assets/current liabilities
Liquidity ratio
current assets - stocks/current liabilities
Debtor Turnover
sales/debtors
Stock Turnover
Cost of sales/stock
Creditor Turnover
cost of sales/trade creditors
Asset Turnover
Sales/fixed assets
or
Sales/fixed assets + current assets
Basic EPS
Net income - preference shares dividends/no. of ordinary shares in issue
Price/Earnings Ratio
Share Price/EPS
Dividend yield
Dividend per share/Current share price x 100
Dividend cover
EPS/Dividend per share
Price to Book
Share price/NAV per share
Modified Duration
Duration/1+gross redemption yield
Standard deviation
Square root of variance
To get variance:
Work out mean of returns
Work out difference of actual return from mean
Square the difference
Add together and devide by number of returns minus 1 (e.g 2 year data divide by 2 = variance
Why TWR?
Not influenced by money added
Focuses on individual manager skill/performance
Compounds multiple periods/ shows change over whole period