Exam 3 Formulas Flashcards
Future value equation:
Future value =
present value * future value factor
Present value equation:
Present value =
future value * present value factor
Future value factors equation:
Future value factor =
(1 + i)^n
Present value factors equation:
Present value factor =
1 / [( 1 + i)^n]
Future value of an ordinary annuity equation:
Future value of an ordinary annuity =
payment amount * FVAF
Future value of an annuity due equation:
Future value of an annuity due =
payment * FVAF * (1 + i)
Present value of an ordinary annuity equation:
Present value of an ordinary annuity =
payment amount * PVAF
Present value of an annuity due:
Present value of an annuity due =
payment amount * PVAF * (1 + i)
Straight line depreciation equation:
Straight line depreciation =
(cost - residual value) / useful life
Book Value equation:
Book value =cost of asset - accumulated depreciation
Sum of years digits depreciation expense equation:
Sum of years digits depreciation =
(cost - residual) * (life / SYD)
Double declining balance annual depreciation expense equation:
Double declining balance annual depreciation expense =
Book value at beg of year * (2 / life)
Units of production depreciation equation:
Units of production depreciation =
[(cost - residual) / total estimated usage ] * actual usage for current year
Reduction of principle equation:
Reduction or principle =
Payment - interest
End loan balance equation:
End loan balance =
beginning loan balance - reduction of principal
Debt to equity ratio equation:
Debt to equity ratio =
Total liabilities / total stockholders equity
Times interest earned equation:
Times interest earned =
Net income + income tax expense + interest expense / interest expense
Earnings before interest and taxes equation:
Earnings before interest and taxes =
Net income + income tax expense + interest expense
Preferred stock dividend equation:
Preferred stock dividend =
par value per share * %
Total preferred stock dividend equation:
Total preferred stock dividend =
par value per share * % * # shares outstanding
Treasury stock account balance equation:
Treasury stock account balance =
# of shares re-acquired * re-acquisition cost
Return on equity equation:
Return on equity =
Net income / average equity
Average equity equation:
Average equity =
Equity at Jan 1 + equity at Dec 31 / 2
Earnings per share equation:
Earning per share =
Net income - preferred stock dividends / # of common shares outstanding
Price earnings ratio equation:
Price earnings ratio =
Market price per share of stock / earning per share
