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F3 Revision > Formulas > Flashcards

Formulas Flashcards

1
Q

Operating profit margin

A

Operating profit/Revenue

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2
Q

Gross profit margin

A

Gross profit/Revenue

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3
Q

ROCE

A

Operating profit/capital employed

PRE TAX

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4
Q

ROE

A

Net equity/Equity Value

POST TAX

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5
Q

Asset turnover

A

Revenue/Capital employed

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6
Q

Gearing

A

Debt/Debt + Equity

OR

Debt/Equity

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7
Q

Interest cover

A

PBIT/Interest payable

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8
Q

P/E Ratio

A

Share price/EPS

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9
Q

Dividend cover

A

EPS/Dividend per share

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10
Q

Dividend yield

A

DPS/Share price

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11
Q

EPS

A

Profit after interest, tax and preference dividends / Number of shares

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12
Q

TERP

A

(N x cum rights price) + issue price / Number of shares

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13
Q

Theoretical value of a right per share

A

TERP - Issue price

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14
Q

Theoretical value of a right per existing share

A

TERP - Issue price / N

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15
Q

Alternative method of TERP

A

(Total value of shares + cash raised + NPV) / Total number of shares after the issue

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16
Q

Purchasing power parity

A

Future spot rate = Current spot rate x (1+if/1+ih)

17
Q

Black Scholes Premium

A

Intrinsic value + time value

18
Q

CIV method

A

Total value of the entity = Tangible asset value + CIV

19
Q

P/E Valuation method, Value per share, Total value of equity

A

Value per share = EPS x p/e ratio

Total value of equity = total post-tax earnings x p/e ratio

20
Q

Share for share exchange

A
  1. Value bidding company and calculate value of a share
  2. Repeat for target company
  3. Calculate value of combine company after takeover (Value of bidding company + value of target company + value of synergy)
  4. Calculate number of shares after tarkeover
  5. Calculate value of share in combined company, and use this to assess the change in wealth of the shareholder after the takeover
21
Q

Interest rate futures number of contracts

A

(Size of loan/Size of contract) x (Duration of loan/Duration of contract)

F3 Revision (15 decks)

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