EQUATIONS TO LEARN Flashcards
ROCE (as a %)
- profit before interest and tax / long term debt plus equity
- profit before interest and tax / total assets – current liabilities
CHAPTER 2
earnings per share (EPS)
profit after interest, tax and preference dividend (earnings for business, money available) / number of issued equity shares
CHAPTER 2
present value to perpetuity
cash flow / cost of capital
CHAPTER 2
total shareholder return (%)
dividend yield (%) + capital gain/loss (%)
= dividend per share / (original)share price + capital gain or loss / (original) share price
CHAPTER 2
price elasticity of demand (simple method)
new demand - initial demand / initial demand x 100
/
new price - initial price / initial price x 100
= % change in qd / % change in p
CHAPTER 3
price elasticity of demand (average method)
new demand - initital demand / average demand x 100
/
new price - initial price / average price x 100
CHAPTER 3
elasticity of supply
% change in quantity supplied / % change in price
CHAPTER 3
the multiplier (circular flow)
1 / 1 - MPC
CHAPTER 7
change in national income
1 / 1 - MPC x rise in injections
(or 1 / MPW)
CHAPTER 7
increase in deposits
initial cash deposit x credit multiplier
CHAPTER 14
credit multiplier
1 / reserve (liquidity) ratio
CHAPTER 14
discount factor (not necessary bc of the tables)
1 / (1 + r) power of n
CHAPTER 15
discount factor to perpetuity
1 / cost of capital
CHAPTER 15
repayments equation
present value / annuity factor (cumulative discount) = annuity
CHAPTER 15
multiplicative/additive models
time series = trend x seasonal variation
time series = trend + seasonal variation
CHAPTER 18
