Formulas

Question 0

L

Answer 0

Liabilities = anything of value that is owed

Question 1

A

Answer 1

Assets = anything of value that is owned

Question 2

NW

Answer 2

New worth = A - L; the measured financial value of a person

Question 3

WC

Answer 3

Working capital = current A - current L

assets available for use

Question 4

AP

Answer 4

Asked price = B+$SC
B/(1-SC%)
Public offering price, or retail offering price; the lowest price a seller is willing to accept.

Question 5

B

Answer 5

Bid Price = AP = $SC
                   AP x (1-SC%)
Net Asset Value (NAV) of a fund or wholesale price if the current market price

Question 6

SC

Answer 6

Sales Charge = AP-B
= %SCxAP
%SC = $SC/AP
used to pay commissions or fees

Question 7

WD

Answer 7

Withdrawal = 45-day WD = NAV+SC

when an investor cancels a plan

Question 8

18MO

Answer 8

18 month refund = NAV = SC-15%

gross contribution

Question 9

After Tax Yield

Answer 9

investor’s return x (10% - tax bracket)

Question 10

Cumulative vote

Answer 10

total number of votes = number of shares x number of vacancies

Question 11

Current Yield

Answer 11

annual dividend/current market price

Question 12

Distribution cost base

Answer 12

current share price - purchase price

Question 13

Dividend yield

Answer 13

annual dividend / share price

Question 14

Expense Ratio

Answer 14

Total expense / total net assets

Question 15

Inflation to Adjusted return

Answer 15

stated return - inflation rate

Question 16

Market Capitalization

Answer 16

all outstanding shares x market price per share

Question 17

Municipal bond tax equivalent yield

Answer 17

municipal yield / 100% marginal tax bracket

Question 18

Net asset value per share

Answer 18

total net assets/total of outstanding of shares

Question 19

P/B ratio

Answer 19

stock price/book value per share

Question 20

P/E ratio

Answer 20

market value of stock / earnings per share

Question 21

percentage of the sales charge

Answer 21

sales charge / offering price

Question 22

Sharpe ratio

Answer 22

(total portfolio return - risk free rate) / portfolio standard deviation

Question 23

value of stock

Answer 23

dividend per share / (discount rate - dividend growth rate)

Question 24

Current Ratio

Answer 24

current assets / current liabilities

Question 25

Quick Ratio

Answer 25

Acid test = current assets - inventory / current liabilities

Question 26

common stock ratio

Answer 26

par value of common + retained earnings + paid in capital / total long term capitalization (stock holder’s equity + bonds)

Question 27

Earnings per share

Answer 27

EPS = Net income - preferred dividend / common shares outstanding

Question 28

fully diluted EPS

Answer 28

net income + convertible bond interest / outstanding common shares + common shares resulting from conversion

Question 29

Dividend payout ratio

Answer 29

annual dividend / earnings per share

Question 30

cash flow

Answer 30

net income (or loss) + current depreciation + amortization

Question 31

Debt / Equity ratio

Answer 31

total liabilities / stockholders’ equity

Question 32

inventory turnover ratio

Answer 32

cost of goods sold / average inventory

Question 33

margin-of-profit ratio

Answer 33

profit ratio = net income/revenue

Question 34

net profit ratio

Answer 34

net profit / net sales

Question 35

interest coverage ratio

Answer 35

earnings before interest and taxes / interest expense

Question 36

book value per share

Answer 36

total shareholder equity - preferred equity / total outstanding common shares

Question 37

return on common equity

Answer 37

net income after preferred dividend / common stockholders’ equity