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Formulas Chapter 2
1. Earnings per share (e.p.s.) Earnings available to common shareholders Number of shares outstanding (23) 4. Dividend yield 1212 2. Payout ratio Dividend per share Earnings per share 5. Market value Book value (22) Market value per share Book value per share

3. P/E ratio

Market share price Earnings per share Net income Sales

Dividends per share Market share price

(24)

MV BV

(25)

Chapter 3
A. Profitability ratios 1. Profit margin

(31)

3. Return on equity (ROE) Net income a. Shareholders equity B. Asset utilization ratios 4. Receivables turnover 5. Inventory turnover

2. Return on assets (investment) (ROA) Sales Net income Net income a. b. Total assets Sales Total assets Total assets Equity c. ROA Equity multiplier (33) Accounts receivable Average daily credit sales Inventory Average daily COGS Accounts payable

(32)

b. Equity multiplier (34a) or

Sales 1credit2 Receivables Inventory

Average collection period (35a) (36a) Inventory holding period b. Accounts payable period

(34b) (35b) (36b)

Cost of goods sold

Sales Inventory

6. a. Accounts payable turnover 7. Capital asset turnover C. Liquidity ratios D. Debt Utilization Ratios 9. Current ratio

Cost of goods sold Accounts payable (37)

Average daily purchases 1COGS2 Sales (38) Total assets Current assets Inventory Current liabilities

Sales Capital assets (39)

8. Total asset turnover 10. Quick ratio

Current assets Current liabilities Total debt Total assets

(310) (312)

11. Debt to total assets 13. Fixed charge coverage

(311) (313)

12. Times interest earned

Income before interest and taxes Interest

Income before fixed charges and taxes Fixed charges PS2 (1 D) (41)

Chapter 4

1. RNF

A ( S) S1 P VC 1SB Q1P Q1P

L ( S) S1 (51) IA SB VC2 365 d SA SA VC2 FC (71a)

2. SGR

P 11 A S1 (54) P 11

D2 a1

DT b E DT D2 a1 b E

(42)

Chapter 5

1. CM 5. EBIT* 8. DOL

2. BE IB 2 (57) S S TVC TVC FC 2. r 365 d 1date2

FC CM

(52) 6. DCL 9. DFL DOL

3. DOL

CM EBIT

4. DFL 7. DCL CM EBT Q1P VC2 (72) VC2 FC

EBIT EBT (510)

(56)

DFL (59) 10. DCL 3. EOQ

EBIT EBIT I 1 (71b)

Chapter 7 Chapter 8

1. r 1. KDIS 4. RDIS

100 P P

a1 (81)

100 P b P

365 d

2SO B C Q1P

S TVC TVC FC SO Q I P CQ 2 365 d

I (73) (82)

4. TC 3. RANNUAL

d% 100% d% I P I 2

f 1date2

2. Amount to be borrowed 5. RCOMP 11 I c2 (84)

Amount needed 11 c2 6. RCOMP I P B

7. RINSTALL

1Total number of payments

365 (83) d Annual number of payments 12

365 d

(85)

I P

(86)

3rd Pass

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Chapter 9

1. FV

PV(1

i)n 11

(91) i2 n
1

2. (1 11 i2

i)n

Effective interest rate (92) 1 11 i i i2 n

1

3. PV 1 i2 n d

FV c

11

1 i2 n

(93)

4. FVA ABGN 11 i2

Ac

11 1

i2 n i i2 n
1

(94a)

5. FVA

ABGN c FVA c 11

i i i2 n d (96a)

(94b)

6. PVA FVA c

(95a)

7. PVA

11 i

(95b)

8. A

9. ABGN

11

11

i2

(96b)

10. A

PVA

i 1 11 A1a D1 Ke D4 Ke g g i 1 i2 n 1 g

(97a)

11. ABGN

PVA

It

i 11 Y2 t i2 11 11 Pn Y2 n 1 i2 n
1

(97b)

12. PV

A i DP KP
n

(99)

13. PV

A1 i DP PP g

(910)

14. PVn

bc1

1 1

g i

b d
n

(911)

Chapter 10

1. Pb 5. Ke

a t 1 11 D1 P0 Y(1 D1 P0 1

(101)

2. Pp 6. P0 Y11 1 T2 F (111b)

(103) Dt Ke 2 t DP /PP 1 Rf F Pn a

3. Kp 1 1 Ke b
n

(104)

4.

P0

(108) (10B2) D1 P0 Kjn g (113) P0 Pn b (116)

g (109)(113)(115) T) g (111a) a 2. Kd D1 P0

a t 1 11 3. Kp

(10B1) 4. Kp DP Pp F

7. P3 (112b)

Chapter 11

1. Kd

(112a)

5. Ke Kj 1 F

6. Kn

or Kn

gb

P0 Pn

(114)

7. Kj

j (Rm

Rf )

(115)

8. Kjn

or

Kj a

9. X

Retained earnings % of equity in the capital structure

j

(117)

Size of the investments 10. Z that lower- cost debt will support 12. Kj 2 1D Rf
j (Rm

Amount of lower- cost debt % of equity in the capital structure

(118) EBIT Ka (Keu

11. Kj 14. Ka Kea

Rm

e (11A1)

Rf ) 16. VL

(11A2) VU TD (11B4)
2 2xA

13. V 17. KeL Keu

(11B1) I)(D/S)(1 T) (11B5)

(11B2)

Chapter 12 Chapter 13

PV of 1. [Cpv CCA tax shield 1. D DP (131) 6. rAB CovAB

A B

15. KeL Keu (Keu I )(D/S) dTc 1 0.5r Spv] a ba b (121) r d 1 r 2. 7.

2 2xA

(11B3)

D2 2P (132)
2 A 2 xB 2 B

3. V

(133) 8.

4. Dp
AB

xi Di
2 A

(134)
2 xB 2 B

5. CovAB 2rAB
A B A B

P1D (138)

Di 2 1F

Fi 2

(135)

(136)

AB

2CovABxAxB (137)

x x

Chapter 17

1.

Shares required Po N S 1

Number of directors desired Total number of shares outstanding Total number of directors to be elected 1 (173) 4. R Pe N S

(171)

2.

Number of directors that can be elected 1Shares owned 12 1Total number of directors to be elected

1Total number of shares outstanding2

12

(172)

3. R

(174) (191) Shares from conversion 12 Contract length 1months2 (211) (192) 3. I 4. S (M W E) N (193)

Chapter 19

1. Face value

Conversion price

Conversion ratio

2. Diluted earnings per share

Adjusted aftertax earnings Shares outstanding Forward Spot Spot

I (194)

Chapter 21

1. Forward premium (discount)

3rd Pass