Formulas

Question 1

Gross Profit

Answer 1

Sales - COGS

Question 2

EBITDA

Answer 2

Gross Profit - Operating Expenses

Question 3

EBIT (Operating Profit)

Answer 3

EBITDA - Depreciation - Amortization

Question 4

Profit before taxes

Answer 4

EBIT - Interest Expense

Question 5

Net Income

Answer 5

Profit before taxes - Taxes

Question 6

Gross Margin

Answer 6

(Revenue - COGS)/Revenue

Question 7

EBIT Margin

Answer 7

EBIT/Revenue

Question 8

(Net) Profit Margin

Answer 8

Net Income/Revenue

Question 9

Contribution Margin

Answer 9

Price/unit - Variable Cost/unit

Question 10

Breakeven Volume

Answer 10

Fixed Costs/(Price/unit - Variable Cost/unit)

Question 11

ROI

Answer 11

Net Income/Cost of Investment

Question 12

Payback Period

Answer 12

Cost of Investment/Profit per year

Question 13

Net Present Value (NPV)

Answer 13

Cash Flow/(1+discount rate)^Year

Question 14

PV of Perpetuity

Answer 14

Payment/Discount Rate

Question 15

PV of Growing Perpetuity

Answer 15

Payment/(discount rate - growth rate)

Question 16

Market Share (Revenue)

Answer 16

Company Revenue/Total Market Revenue

Question 17

Market Share (Units)

Answer 17

Company Units/Total Market Units

Question 18

5 Levers of Profitability

Answer 18

1. Increase Prices
2. Increase Volume
3. Decrease Costs
4. Change Product Mix
5. Sell Alternative Products

Question 19

Return on Equity (ROE)

Answer 19

Net Income/(Equity1 + Equity2)/2

Question 20

Return on Assets (ROA)

Answer 20

Net Income/(AssetsP1 + AssetsP2)/2

Question 21

Rule of 72

Answer 21

Dividing 72 by the growth rate will tell you how many periods it will take for your present value to double.

Example:
Present Value = 100
Growth Rate = 12%
Rule of 72 = 72/12 = 6
It will take 6 periods for 100 to grow to 200