Formulas

Question 1

Assets

Answer 1

Current assets + long-term assets

Question 2

Current assets

Answer 2

Cash + accounts receivable + inventories

Question 3

Liabilities

Answer 3

Current liabilities + long-term liabilities

Question 4

Stockholders equity

Answer 4

Common stock + retained earnings

Question 5

Book value of equity

Answer 5

Total assets - total liabilities

Question 6

Market capitalization

Answer 6

Price of share x shares outstanding

Question 7

Market to book ratio (P/B)

Answer 7

Market cap / book value of equity

Question 8

Debt to equity ratio (D/E)

Answer 8

Total liabilities / stockholders equity

Question 9

Current ratio

Answer 9

Total current assets / total current liabilities (1.5-2)

Question 10

Quick ratio (acid test)

Answer 10

(Total current assets - inventories) / total current liabilities (0.75-1.25)

Question 11

Cash ratio

Answer 11

Cash / total current liabilities

Question 12

Enterprise value

Answer 12

Market cap. + debts - cash

Question 13

Net income

Answer 13

Revenues - expenses

Question 14

Gross profit

Answer 14

Net sales - COGS

Question 15

Operating expenses

Answer 15

Selling general and administrative expenses + R&D + depreciation and amortisation

Question 16

EBITDA

Answer 16

Interest + tax + depreciation + amortisation + net income

Question 17

Operating income

Answer 17

Gross profit - operating expenses

Question 18

Depreciation (straight-line method)

Answer 18

Price of asset / # of years in the useful life of the asset

Question 19

Net book value

Answer 19

Gross book value - accumulated depreciation

Question 20

Earnings per share (EPS)

Answer 20

Net income / shares outstanding

Question 21

Gross margin

Answer 21

Gross profit / net sales (%)

Question 22

Operating margin

Answer 22

Operating income / net sales (%)

Question 23

Net profit margin

Answer 23

Net income / net sales (%)

Question 24

ROE

Answer 24

Net income / equity

Question 25

ROA

Answer 25

Net income / total assets

Question 26

Accounts receivable days

Answer 26

Accounts receivable / average daily sales

Question 27

Inventory turnover

Answer 27

COGS / inventory

Question 28

Asset turnover ratio

Answer 28

Net sales / total assets

Question 29

Asset turnover & ROA

Answer 29

ROA = asset turnover x net profit margin

Question 30

Interest coverage ratio

Answer 30

EBIT / interest expenses

Question 31

DuPont identity

Answer 31

ROE = Net profit margin x asset turnover x equity multiplier

Question 32

Equity multiplier

Answer 32

Total assets / stockholders equity

Question 33

Price to earnings (P/E)

Answer 33

Market cap / net income
Share price / EPS

Question 34

Cash from Operating activities

Answer 34

Net income + D&A - accounts receivable + accounts payable - inventories

Question 35

Cash from Investment activities

Answer 35

Cash from operating activities - CAPEX +/- buying or selling of marketable securities

Question 36

Change in cash of Finance activities

Answer 36

Cash from investment activities - payments of dividends + changes in borrowings

Question 37

Payout ratio

Answer 37

Total dividends / net income

Question 38

Variable costs

Answer 38

Total quantity of output x variable cost per unit of outputs

Question 39

Breakeven analysis (BEP)

Answer 39

Fixed costs / (price per unit - variable cost per unit)

Question 40

Net present value (NPV)

Answer 40

Cash flow / (1+i)^t - inicial investment

Question 41

Payback period

Answer 41

Cost of investment / average annual cashflow

Question 42

Net working capital

Answer 42

Current assets - current liabilities

Question 43

Profit

Answer 43

Revenue - costs