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Formula Finder
The Formula Finder is a list of formulas in the CSC text listed by chapter.
Chapte
r
Key Words:
Inflation
7 Present Value
(PV) Future value of principal
Key Words:
Income stream;
coupon payment;
worth
7 Current Yield
7 Treasury Bill
Yield
7 Approximate
Yield to Maturity
7 Nominal Bond
Rate of Return
7 Accrued Interest
Note: options cannot have intrinsic value less than zero. A negative result from the
Key Words: formula above indicates the intrinsic value is simply zero.
Intrinsic value;
Value of an Option
10 Intrinsic Value of
a Put Option Strike Price - Price of the Underlying
10 Option premium
10 Intrinsic Value of
Rights
(During the Cum
Rights Period)
10 Intrinsic Value of
Rights
(During the Ex
Rights Period)
11 Declining-
Balance
Depreciation
14 Stock Intrinsic
value (Dividend
Discount Model)
Expected dividend paid out in 1 year
14 Return on
Common Equity
(ROE)
Profit
x 100
Total Equity
Key Words:
ROE;
return on
investment
14 Working Capital
Ratio
Current assets
Current liabilities
Key Words:
Current ratio
Key Words:
The acid test;
corporate ratio;
liquidity ratio
14 Asset Coverage
Total assets - goodwill - intangible assets -
[current liabilities less short-term debt]
14 Debt/Equity
Ratio
Equity
Key Words:
Debt burden;
capital structure
14 Cash Flow/Total
Debt
14 Interest Coverage
Interest charges
14 Net Profit
Margin
Profit - share of profit of associates
x 100
Revenue
Key Words:
Net profit
14 Inventory
Turnover Ratio
Cost of sales
Inventory
Key Words:
Inventory ratio;
turnover ratio
14 Dividend Payout
Ratio
Common share dividends
x 100
Profit
14 Earnings per
Common Share
Profit
Key Words:
Weighted-average number
EPS; of common shares outstanding
common stock
value;
diluted earnings
p/share
14 Fully Diluted Adjusted profit
Earnings per
Common Adjusted weighted-average number
of common shares outstanding
14 Dividend Yield
14 Price-Earnings
Ratio (PE
Multiple)
Current market price of common earnings per share
14 Equity Value
(Book Value) per
Common Share
Equity
15 Expected Return
15 Return on
Investment
Key Words:
Real return
15 Porfolio Return
R1(W1) + R2(W2) +... + Rn(Wn)
R= Security return;
Key Words:
W=% weighting in portfolio
Weighted average
return
16 Total Return
Formula (Pre-
tax)
Increase in market value
x 100
Beginning value
Key Words:
Total return %;
real return
16 Sharpe Ratio
Key Words:
Sharpe ratio
17 NAVPS
17 Offering/Purchas NAVPS
e price
100% - Sales charge
Key Words:
Purchase amount;
load charge;
sales charge;
offering price
17 Selling/Redempti
on price
17 Management
Expense Ratio
18 Comparing
mutual fund
performance
21 Index-Linked
GIC Overall
Return
Index Growth = (Ending Index Level – Initial Index Level) / Initial Index Level x
100
Overall Return = Index Growth x Participation Rate
Key Words:
Index-Linked GIC
22 Dividend Gross-
up and Tax
Credit
1. Gross up dividend by 38%: dividend x 1.38
2. Federal tax: grossed up amount x Tax rate
3. Tax credit of 15.02%: grossed up amount x 0.1502
Key Words: 4. Federal tax payable = Federal tax
Dividend gross- (Step 2) minus Tax credit (step 3)
up;
tax credit
calculation
© Candian Securities Institute (2017)