Financial Equations Flashcards
Annual Debt Service
All interest and principal paid for all oans for one year
Annual Depreciation Rate
1 / # of years to depreciate
Annual Depreciation Amount
Original value * depreciation rate
Break Even Ratio
(Operating Expenses + Debt Service) / Effective Gross Income
Cash on Cash Return
Before Tax Cash Flow / Cash Invested
Current Ratio
Current Assets / Current Liabilities
Cap Rate
Net Operating Invomce / Property Value
Capitalization Rate
Net Income / Sales Price
Debt Coverage Ratio
Net Operating Income / Annual Debt Service
Debt-to-Worth Ratio
Liabilities / Tangible Net Worth
Doc Stamp Deed Tax
(Sales Price / 100) * 0.70
Doc Stamp Tax on Notes
(Loan Amount / 100) * 0.35
Effective Gross Income
Potential Gross Income - Vacancy and Credit Losses
Gross Rent Multiplier
Sales Price / Gross Monthly Rent
Gross Income Multiplier
Sales Price / Gross Annual Income
Inventory Turnover Ratio
Cost of Goods / Ending Inventory
Intangible Tax on New Mortgage
Mortgage Amount * 0.002
Net Income Ratio
Net Operating Income / Effective Gross Income
Net Operating Income
Effective Gross Income - Operating Expenses
Operating Expense Ratio
Operating Expenses / Effective Gross Income
Potential Gross Income
Total Yearly Rental Income + Total Yearly Income From Other Sources
Quick Ratio
(Current Assets - Inventory) / Current Liabilities
