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CME-1 (Part 2) English > Formulas > Flashcards

Formulas Flashcards

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1
Q

Chapter 6: Liquidity analysis: Current Ratio

A

Current Assets
___________
Current Liabilities

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2
Q

Chapter 6: Liquidity analysis: Quick or Acid Test Ratio

A

(Current Assets - Inventory)
___________
Current Liabilities

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3
Q

Chapter 6: Leverage Ratios: Debt Ratio

A

Long Term Debt
___________
Total Assets

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4
Q

Chapter 6: Leverage Ratios: Debt to Equity (or Gearing) Ratio

A

Long Term Debt
___________
Equity

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5
Q

Chapter 6: Leverage Ratios: Interest Cover

A

Operating Income
___________
Interest Expense

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6
Q

Chapter 6: Profitability Ratios: Sales to Assets

A

Sales
___________
Total Assets

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7
Q

Chapter 6: Profitability Ratios: Net Profit Margin

A

Net Income
___________
Sales

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8
Q

Chapter 6: Profitability Ratios: Return on Assets

A

Net Income
___________
Total Assets

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9
Q

Chapter 6: Return on Assets (with Sales, Net Income, and Total Assets)

A

Return on Assets = Sales to Assets X Net Profit Margin

Sales to Assets = Sales / Total Assets
Net Profit Margin = Net Income / Sales

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10
Q

Chapter 6: Return on Equity

A

Net Income
___________
Equity

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11
Q

Chapter 6: Return on Equity with Return on Assets

A

Return on Assets X Net Income / Equity

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12
Q

Chapter 6: Inventory Turnover Ratio

A

Cost of Goods Sold
___________
Inventory

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13
Q

Chapter 6: Payout Ratio

A

Dividends
___________
Earnings

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14
Q

Chapter 6: Retention Rate

A

1 - Payout Ratio

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15
Q

Chapter 6: P/E Ratio

A

Share or Market Price
___________
Earnings

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16
Q

Chapter 6: Market to Book Ratio

A

Share or Market Price
___________
Book Value

17
Q

Chapter 6: Dividend Yield

A

Dividend
______________________
Share or Market Price (last year)

18
Q

Chapter 8: Future Value

A

FV = PV ( 1 + i / m ) ^ n * m

19
Q

Chapter 8: Present Value

A

PV = FV / ( 1 + i ) ^ n

20
Q

Chapter 8: Future Value of Annuity

A

FVA = PMT / i [ ( 1 + i ) ^ n - 1 ]

21
Q

Chapter 8: Present Value of An Annuity

A

Look at notes… Cannot type it here.

PVA = PMT / i [ ( 1 + i ) ^ n - 1 / ( 1 + i ) ^ n ]

22
Q

Chapter 8: Present Value of Perpetuity

A

PVP (without growth each year forever) = PMT / i

PVP (with growth each year forever) = PMT / i - g

23
Q

Chapter 8: Rate of Return

A

R = Capital Gain + Dividend Yield

Capital Gain =

Selling Price - Purchase Price
_________________________
Purchase Price

Dividend Yield =

Cash Dividend
____________
Purchase Price

24
Q

Chapter 9: Preferred Stock Valuation

A

Share price =

Dividends
___________________
Required Rate of Return

25
Q

Chapter 9: Common Stock

A

Look at notes…

Dividends
_________
(1 + K) ^ n…

26
Q

Chapter 9: Constant Dividends

A

Dividends
________
Required Rate of Return

27
Q

Chapter 9: Dividends with Constant Growth

A

D ( 1 + g )
________
Return - g

28
Q

Chapter 9: Dividend with Constant Growth (will pay… future)

A

Dividend
________
Return - g

29
Q

Chapter 9: Constant Growth and Dividend Payout Ratio

A 
g = (1 - payout ratio) x Return on Equity
g = Retention Rate x Return on Equity
30
Q

Chapter 13: Sharpe Ratio

A

(Fund Average Return – Risk Free Return) / Standard Deviation of the Fund

31
Q

Chapter 13: Alpha

A

Fund return – [Risk free rate + Beta of fund (Benchmark return – Risk free return)]

Also:
Fund return - CAPM

32
Q

Chapter 13: Treynor’s Ratio

A

(Fund Average Return – Risk Free Return) / Beta of the Fund

33
Q

Chapter 13: Net Asset Value

A

(Market Value of Assets – Liabilities) / Number of Units

34
Q

Chapter 12: Nominal Rate

A

1 + nominal rate = (1 + real rate) * (1 + inflation rate)

35
Q

Chapter 12: Real Rate

A

1 + real rate = 1 + nominal rate / 1 + inflation rate

36
Q

Chapter 12: Return on two asset portfolio

A

Return of portfolio = weighting 1 x return 1 + weighting 2 x return 2

37
Q

Chapter 12: CAPM (Overall market)

A

Return = Rf + Beta (R market - Rf)

38
Q

Chapter 12: CAPM (Market Premium)

A

Return = Rf + Beta (Market Premium)

CME-1 (Part 2) English (8 decks)

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