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General Management > Formulas > Flashcards

Formulas Flashcards

1
Q

What is formula for Return on Equity?

A

= Net profit / Equity

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2
Q

What is formula for Return on Assets?

A

= Profit before financial expenses / Total assets

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3
Q

What is formula for Return on Operating Net Assets?

A

= Operating profit / Operating net assets

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4
Q

What is formula for Return on capital employed?

A

= Profit before financial expenses / Capital employed

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5
Q

What is formula for Capital Employed?

A

= Equity + Interest-bearing debt

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6
Q

What is formula for Debt equity ratio?

A

= Total liabilities / total equity

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7
Q

What is formula for Dib equity ratio?

A

= Interest-bearing debt / total equity

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8
Q

What is formula for Net debt equity ratio?

A

= (Interest-bearing debt – financial assets) / total equity

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9
Q

What is formula for Interest coverage ratio?

A

= Profit before interest expenses / interest expenses

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10
Q

What is formula for EBITDA coverage?

A

= EBITDA / interest expenses

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11
Q

What is the DuPont formula for ROA?

A

(Profit before financial expenses / Sales) * (Sales / Total assets)

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12
Q

What is the DuPont formula for ROCE?

A

(Profit before financial expenses / Sales) * (Sales / Capital employed)

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13
Q

What is the DuPont formula for RONA?

A

(Operating profit / Sales) * (Sales / Operating net assets)

Operating net assets = Total assets – Dnib – Financial assets

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14
Q

What is formula for Operating net assets?

A

Operating net assets = Total assets – Dnib – Financial assets

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15
Q

What is the Solvency ratio?

A

Solvency = Equity/Assets

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16
Q

What are the Debt-to-equity ratios?

A

D/E , Dib/E , ND/E

Dib = Interest bearing debt
ND = Net debt = Lib - (Cash + marketable securities)
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17
Q

What is Net Debt?

A

Net Debt = Lib - (Cash + marketable securities)

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18
Q

What is the formula for Current ratio?

A

= Current assets / Current liabilities

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19
Q

What is the formula for Quick ratio?

A

= (Current assets - Inventory) / Current liabilities

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20
Q

What is the formula for Cash availability?

A

= (Cash + Marketable securities) / Sales

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21
Q

What is the formula for Capex ratio?

A

= Cash flow from operations / Net investments

22
Q

What is the formula for Defensive interval?

A

= ((Liquidt assets + accounts receivable) / Projected expenditures) * 365

23
Q

What is the formula for Number of days in inventory?

A

(Average inventory / COGS) * 365

24
Q

What is the formula for Number of credit days customers?

A

(Average accounts receivables / Sales) * 365

25
Q

What is the formula for Number of credit days suppliers?

A

(Average accounts payables / Purchases) * 365

Purchases = CGS + Inventory CB – Inventory OB

26
Q

What is the ROA leverage formula?

A

ROE = (1-t) * [ROA + (ROA - COD) * D/E]

27
Q

Which part of the leverage formula (ROA) shows return from capital financed by creditors?

A

(ROA - COD) * D/E (in other words: “spread” * leverage)

28
Q

Which part of the leverage formula (ROA) shows return from own capital?

A

ROA

29
Q

Which part of the leverage formula (ROA) shows operating risk?

A

ROA

30
Q

What is the formula for purchases?

A

Purchases = CGS + Inventory CB – Inventory OB

31
Q

Which part of the leverage formula (ROA) shows financial risk?

A

D/E

32
Q

What is the ROCE leverage formula?

A

ROE = (1-t) * [ROCE + (ROCE - CODib) * Dib/E]

33
Q

What is the growth formula?

A

∆E / E = ROE – (DIV / E) + (Newly issued shares / E)

34
Q

What is the interest coverage ratio?

A

Interest coverage ratio = Profit before interest expenses / interest expenses

35
Q

What is EBITDA coverage?

A

EBITDA coverage = EBITDA / interest expenses

36
Q

What is the Cash Conversion Cycle?

A

CCC = Number of days in inventory + number of credit days customers - number of credit days suppliers

37
Q

What is the ROCE DuPont identity?

A

ROCE = PM * TOCE

38
Q

What is TOCE?

A

TOCE = Turnover of Capital Employed = Sales/CE

CE = Equity + Lib = Assets - Lnib - financial assets

39
Q

What is the earnings ratio?

A

P/E = Share price at time t / Earnings in period t+1

40
Q

What is the market to book ratio?

A

M/B = Stock market value of equity at time t / book value of equity at time t

41
Q

What is residual income (RI)?

A

RI = EBIT - (cost of capital*capital invested)

Cost of capital = WACC

42
Q

What is Economic Value Added (EVA)?

A

EVA = NOPAT - (cost of capital * capital invested)

NOPAT = Net operating profit - Tax
Note: EVA is a modern version of RI

43
Q

What is the WACC formula?

A

WACC = Dib / (E + Dib) * ( 1 –T ) * CODib + E / (D + E) * re

44
Q

What is the alternate EVA formula?

A

EVA = (ROCE (1–T) – WACC) * CE

45
Q

What is working capital (WC)?

A

WC = Cash + accounts receivable + inventory - accounts payable

46
Q

What is the formula for COD?

A

= Interest expense / All debt = Interest expense / Liabilities

47
Q

What is the formula for CODib?

A

= Interest expense / Interest bearing debt

48
Q

What is the formula for COND?

A

= Fin expense – Fin income / ND (i.e. Dib – Fin assets)

In other words, COND = Net financial expenses / Net debt

49
Q

What is the formula for NOPAT?

A

NOPAT = Net operating profit - Tax

Note: EVA is a modern version of RI

50
Q

What is the formula for projected expenditures?

A

= net expenses (i.e. cost of goods sold + sales and administrative costs + other operating expenses - other operating revenue) minus depreciation and amortization

General Management (24 decks)

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