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CMA Part 2 > Formulas > Flashcards

Formulas Flashcards

1
Q

Current Ratio

A

Current Assets / Current Liabilities

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2
Q

Quick Ratio

A

(Cash+ Market + AR) / Current Liabilities

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3
Q

Cash Ratio

A

(Cash + Market) / Current Liabilities

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4
Q

Cash Flow Ratio

A

Operating CF / Current Liabilities

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5
Q

Net Working Capital Ratio

A

(Current Assets - Current Liabilities) / Total Assets

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6
Q

DOL

A

CM / OI
or
% chg in EBIT / % chg in Sales

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7
Q

DFL

A

OI / EBT
or
% chg in NI / % chg OI

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8
Q

Financial Leverage Ratio (FLR)

A

Total Assets / Equity

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9
Q

DER (Debt to Equity Ratio)

A

Total Debt / Equity

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10
Q

DTAR (Debt to Total Assets Ratio)

A

Total Debt / Total Assets

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11
Q

FCCR (Fixed Charge Coverage Ratio)

A

Earnings before FC and taxes / FC

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12
Q

ICR (Interest Coverage Ratio)

A

Earnings before Int and taxes / Int Exp

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13
Q

CFFCR (Operating CF to Fixed Charge Ratio)

A

(OCF + FC + Tax) / FC

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14
Q

ARTO

A

Credit Sales / Avg AR

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15
Q

ITO

A

COGS / Inv

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16
Q

APTO

A

Credit Purchases / Avg AP

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17
Q

DSO

A

365 x ARTO
or
365 x (Avg gross AR / Credit Sales)

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18
Q

DSI

A

365 x ITO
or
365 x (Inv / COGS)

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19
Q

DPAP

A

365 x APTO
or
365 x (Avg AP / Credit Purchases)

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20
Q

TAT

A

Sales / Total Assets

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21
Q

FAT

A

Sales / Fixed Assets

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22
Q

G.O.N.E

A

GP/ Sales, OP/ Sales, NP/Sales, EBITDA/Sales

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23
Q

ROA

A

NI / Average Total assets

ROE x (1-debt ratio)

Net Profit margin x Asset turnover

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24
Q

ROE

A

NI / Average Equity

Profit Margin x Asset Turnover x Leverage

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25
Q

BV per Share

A

(Total SHE - Pref Equity) / # of CS outstanding

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26
Q

MV to BV

A

Market Price per share / BV per share

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27
Q

BEPS (Basic Earnings per share)

A

(NI - Pref Div) / WACSO (or avg C/S for EPS)

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28
Q

DEPS

A

(NI - Pref Div) / Diluted WACSO

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29
Q

Earnings Yield

A

EPS / MP per CS

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30
Q

Dividends Yield

A

Annual Div per share / MP per share

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31
Q

Dividend Payout Ratio

A

Common Div / Earnings avail to CS

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32
Q

P/E Ratio

A

MP per Share / EPS

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33
Q

Price to EBIDTA

A

MP per Share / EBITDA per share

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34
Q

Shareholder Return

A

(End Stock $ - Beg Stock $ + Ann div per share) / Beg Stock $

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35
Q

Rate of Return % (ROI)

A

Income (from asset/investment) / Avg invested amount

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36
Q

CAPM

A

Rf + B(Rm - Rf)

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37
Q

PV of Bond

A

PV (Principal) x (PV (Interest) OR (PVFp x P) + (PRFAi x I)

38
Q

Nominal Risk Premium

A

Avg Market Return - Risk free rate (Rf)

39
Q

Coefficient of Variation (CV)

A

Std dev / expected returns

40
Q

Common Stock Valuation

A

sum of [(Dn/ (1+i)n)]

41
Q

Future Selling $ Stock Value

A

Sum (Dn/ (1+i)n) + Pn/ (1+i)n

42
Q

Value of a call option

A

Max (0, Market Price - Strike Price)

43
Q

WACC

A

(CWd x Cd(1-t)) + (CWp x Cp) + (CWc x Cc)

44
Q

WMCC

A

(TWd x Cd(1-t)) + (TWp x Cp) + (TWc x Cc)

45
Q

Cost of Capital Breakeven

A

Unappropriated R.E / Target Weight CS in capital structure

46
Q

Zero Growth div discount

A

Po= D/r

47
Q

Constant Growth Div Discount

A

Po = D1 / r-g

48
Q

Gordan growth (Future div or cost of new stock)

A

Cre = (D1/Po) + g

49
Q

Price to sale ratio

A

Total Market Cap / Total sales OR MPS/Sales per share

50
Q

Stock Value rate

A

r= D1+ (P1-Po) / Po

51
Q

Stock Value price

A

Po = (D1 + P1) / 1-r

52
Q

Cost of debt

A

Int Exp / Cash received from sale of bond

53
Q

Cost of newly issued Pref Stock

A

Yearly Div / Net proceeds of issue

54
Q

Lockbox benefit

A

Float reduction in days x Avg daily receipts x Int rate

55
Q

Tax Equivalent yield

A

Tax - Free yield / 1 - Marginal Tax rate

56
Q

Annual Carrying Cost (Inv)

A

Carrying cost per unit x (# of units ordered / 2)

57
Q

Annual Ordering cost

A

Cost per order x # of orders

58
Q

Total annual cost of inventory

A

Annual Carrying - Annual ordering

59
Q

Effective annual forgoing cash discount

A

D / (1-D) x (365/n)

60
Q

Effective annual forgoing int rate

A

(1+ periodic rate)n - 1

61
Q

CVP Formula

A

OP = S - VC- FC

62
Q

Breakeven Units

A

Total FC / CM per unit

63
Q

Breakeven dollars

A

Total FC / CM ratio

64
Q

Breakeven Units (pretax)

A

Total FC + Profit target / CM per unit

65
Q

Breakeven dollars (pretax)

A

Total FC + profit target / CM ratio

66
Q

Target income in units

A

(FC + Targeted OI) / CM per unit

67
Q

Pre Tax Profit Target

A

After Tax Profit Target / (1- Tax rate)

68
Q

WACM per unit

A

(CMP1 x SMP1) + (CMP2 x SMP2) +…

69
Q

Multiple product Breakeven

A

Total FC / WACM

70
Q

Safety Margin (units/dollars)

A

Excess Sales Level - Breakeven Sales Level

71
Q

Margin of Safety Ratio

A

Safety Margin / Total Sales

72
Q

Total/Avg Fixed/Ave VC

A

(AFC/AVC/ATC) / # of units produced

73
Q

CM per scarce resource

A

UCM/ scarce resource to produce per unit

74
Q

“Accept/Reject Special order or to further process

Sale as Is”

A

Incremental Revenue - Incremental Costs

75
Q

Continue or drop line

A

CM - Avoidable FC and Exp (included opportunity costs)

76
Q

Basic Cost based method

A

Price = Cost basis + Markup (MU)

77
Q

Price

A

Cost x (1 + MU%) or (FC + VC + Profit) / # of units produced

78
Q

Target Costing per Unit

A

(1 - Target Rate) x Total Sales $ / # units of sold

79
Q

Cost & rate of Return

A

VC + FC + ( Target Rate x Return Measure) / # units sold

80
Q

Price Elasticity of Demand Formula

A

% Change in Demand / % Change in Price

81
Q

Capital Adequacy Ratio

A

(Tier 1 Capital + Tier 2 Capital) / Risk Weighted Assets

82
Q

Expected Loss

A

sum of (LOSS AMOUNTn) x (LOSS Probabilityn)

83
Q

Net Real Value

A

Nominal value/ Price Index or Monetary Rate / (1+Inflation)

84
Q

Percentage of Base

A

Amount of line item / base amt

85
Q

Growth rate of Total Assets

A

(EB - BB) / BB

86
Q

Growth Rate of Sales

A

Chang in sales / base year sales

87
Q

Return on Common Equity

A

NI - Preferred Dividends / Avg Common Equity

88
Q

Dilution Effect of Convertible Bonds

A

(Total Debt x Debt Rate) x (1- tax rate) / CS to be issued if convertible.

89
Q

Dilution Effect of Preferred Stock

A

(Pref Div or Declared Div) / CS to be issued

90
Q

Return on Shareholder Investment

A

Div Paid + MV R.E / # CS x Share price

91
Q

Working Capital Turnover Ratio

A

Net sale / Quick Assets - Current Liabilities

CMA Part 2 (3 decks)

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