Formulas Flashcards
Operating profit margin
Operating profit/Revenue
Gross profit margin
Gross profit/Revenue
ROCE
Operating profit/capital employed
PRE TAX
ROE
Net equity/Equity Value
POST TAX
Asset turnover
Revenue/Capital employed
Gearing
Debt/Debt + Equity
OR
Debt/Equity
Interest cover
PBIT/Interest payable
P/E Ratio
Share price/EPS
Dividend cover
EPS/Dividend per share
Dividend yield
DPS/Share price
EPS
Profit after interest, tax and preference dividends / Number of shares
TERP
(N x cum rights price) + issue price / Number of shares
Theoretical value of a right per share
TERP - Issue price
Theoretical value of a right per existing share
TERP - Issue price / N
Alternative method of TERP
(Total value of shares + cash raised + NPV) / Total number of shares after the issue
Purchasing power parity
Future spot rate = Current spot rate x (1+if/1+ih)
Black Scholes Premium
Intrinsic value + time value
CIV method
Total value of the entity = Tangible asset value + CIV
P/E Valuation method, Value per share, Total value of equity
Value per share = EPS x p/e ratio
Total value of equity = total post-tax earnings x p/e ratio
Share for share exchange
- Value bidding company and calculate value of a share
- Repeat for target company
- Calculate value of combine company after takeover (Value of bidding company + value of target company + value of synergy)
- Calculate number of shares after tarkeover
- Calculate value of share in combined company, and use this to assess the change in wealth of the shareholder after the takeover
Interest rate futures number of contracts
(Size of loan/Size of contract) x (Duration of loan/Duration of contract)
