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O o o o o Total Costs Q X V + FC o Accounting Break-Even: Q (FC + D) / (P-V)

This document outlines numerous financial statement formulas used for assets, liabilities, equity, income statements, cash flows, ratios, capital budgeting, capital structure, valuation, mergers and acquisitions, and tax calculations. Key formulas include the accounting equation of assets = liabilities + equity, net income calculation, return on equity, discounted cash flow calculations like net present value, weighted average cost of capital, and control premium calculations for M&A transactions.

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Ana C. Richiez
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96 views3 pages

O o o o o Total Costs Q X V + FC o Accounting Break-Even: Q (FC + D) / (P-V)

This document outlines numerous financial statement formulas used for assets, liabilities, equity, income statements, cash flows, ratios, capital budgeting, capital structure, valuation, mergers and acquisitions, and tax calculations. Key formulas include the accounting equation of assets = liabilities + equity, net income calculation, return on equity, discounted cash flow calculations like net present value, weighted average cost of capital, and control premium calculations for M&A transactions.

Uploaded by

Ana C. Richiez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Financial Statement Formulas

Assets = Liabilities + Equity or Assets – Liabilities = Equity or Liabilities + Equity – Assets = 0


Net Working Capital= (current assets – current liabilities)
Net Operating Capital= [current assets – cash] - [current liabilities – current debt]
Equity Acc
 Common stock = shares sold x par value per share
 Additional Paid in Capital = shares sold x [selling price – par value]
 Total capital raised from shareholders = Common Stock + APIC (financing activities)
 Current RE= Previous RE + Current Net Income – Current Dividends
 Treasury Stock= #of repurchased shares x weighted average repurchase price
 Minority interest Total common equity= total assets – total liabilities – minority interest
 Book Value of Common Equity=Total Assets – Minority Interest - Total Liabilities
 Market Value of Common Equity=Total Shares Outstanding x Price Per Share
 Market to Book Ratio=Market Value / Book Value
 Net Capital spending= [Previous PPE – Current PPE] – Current depreciation OR =change in PPE-Depreciation
Income Statement
 EPS= Net income/ weighted average shares
 Payout ratio=Dividend per share(DSP) / Earnings per share(EPS)
 Payout ratio= Dividend / Net Income
 Dividend per share=payout ratio x EPS
 Dividend per Share=dividend / shares outstanding
 LTM = “Latest 12 months”, TTM = “Trailing 12 months”
Cash Flow
 Plus net change in cash (CFFO+CFFI+CFFF) = Ending Cash - Current Period Ending Balance Sheet
 Operating CF (OCF)= EBIT + Depreciation & Amortization – Taxes (no F / I / ∆ OC )
 Unlevered Free CF= Net Operating Profit After Tax (NOPAT) + Depreciation and Amortization - Capital Expenditures +/- Change in Operating
Capital (less any increase, plus any decrease)
o NOPAT=EBIT x (1-tax rate)
 CFA(CF from Assets)= Cash Flow to Creditors + Cash Flow to Shareholders
 CFA(CF from Assets)= OCF – Capital Expenditures +/- Changes in Working Capital
o OCF=EBIT + depreciation – taxes
o Capital investment=End net fixed assets-Beg. Net fixed asset + depreciation
o NWC investment= net change
 Cash flow to Investors= Debt to holder + Equity to holder = CFA
o Debt to holders=interest + retirement of debt – new debt
o Equity to holder=dividends + stock repurchase – new stock issues
Ration Analysis Formulas
 Growth: Periodic or Sequential Growth Rate=(New Value / Old Value) – 1
o future value = old value x (1+ growth rate)
 Profitability: Gross profit/sales | EBIT/sales | EBITA/sales | Net Inc/sales
 Working capital(Assets): COGS / Inventory | Inventory/COGS x 365 |Sales / AR | AR/Sales x 365
o LT and total turnover: Sales/Fixed assets | Sales/Total Assets
 Working capital(liability): COGS/Accounts Payable | AP/COGS x 365
 ROI
o Return on Assets (ROA)=Net Income/ Avg Total Assets | EBIT / Avg Total Assets
o Return on Invested Capital (ROIC)= (EBIT x (1-tax rate))/Avg (debt + equity)
o Return on Equity (ROE)= Net Income Margin x Asset Turnover x Equity Multiplier
 Investment rate=Growth / ROIC
 New required investment = NOPAT x Investment rate
 Capital structure: Debt / Equity | Debt / (Debt + Equity) | Equity multiplier= Total Assets / Total Equity
 Total invested capital= old invested capital + new invested capital
 Current Ratio=current asset/current liabilities
 Quick ratio=current assets-inventories / current liabilities
Capital Budgeting Formulas
 PV= FV / (1+r%)^n
 PV Factor=1 / (1+r%)^n  PV=PV Factor x FV
 WACC = [Ke x (E/(E+D)] + [(Kd x (D/(E+D)) x (1-T)]
 CAPM Cost of Equity = Risk Free Rate + (Beta x Equity Market Premium) or Rf+ β(Rm - Rf)
 Payback
o Cumulative CF=Prior year cumulative cash flow + current year project cash flow
o Stud payback= 1-(Last negative cumulative CF / First positive or stud period Project CF)
 Profitability Index=PV of cash flows after investment / Initial investment
 Break Even
o Total Variable Costs = Q x v
o Variable Cost Per Unit (v) = Total Variable Costs / Q
o Total Costs = Q x v + FC
o Accounting break-even: Q = (FC + D) / (P-v)
o OCF break even Q = (FC) / (P-v)
Capital Structure
 Debt to Equity= D/E
 Debt Ratio: Debt to Total Capital= D/(E+D)
 ROE=Net income/Equity or EPS/stock price
 EPS=Net income/#shares

W/o Tax

 Proposition 1: VL=Vu
 Proposition 2: WACC L=WACC u | KeL= KeU + D/E (KeU-Kd)

With Tax value of Levered firm goes up,

 Proposition 1: VL = VU + Present Value of Tax shield


 Proposition 2: WACC L < WACC u decreases | KeL = KeU + D/E x (1-T) x (KeU - Kd)

Tax-Shield

 Tax Shield or tax benefit= Debt x Interest Rate x Tax Rate


 Present Value of Tax Shield= (Debt x Interest Rate x Tax Rate) / Interest Rate OR  D x Tax Rate
 Value of a LEVERED firm= Value of Unlevered + PV Tax shield

Value of Equity $ + Value of debt $= Value of Firm

Value and Valuation

 Enterprise/Firm value(EV)= Equity value + Net Debt + Preferred Stocks + Minority Interest
 Non-equity claims=Net debt(Debt-cash) + Preferred Stocks + Minority Interest
 Equity(MVE)= Residual value + Non-equity claims(EV)
o Equity= Enterprise/Firm Value - Net debt - Preferred stock – Minority Interest
o Equity=stock price x # of shares
 Fully diluted shares= Basic + CSE
o CSE(Common Share Equivalents)=Employees stock option + convertible securities
 Employee Stock Options: # of shares(option a) x Exercise price = Proceeds / P-current stock or market price =
(Repurchased shares) + # of shares(option a)= CSE
 Convertible Securities= Face amount of convertible debt or senior note / conversion price
 Conversion price(given)= Face Value / conversion ratio
 Conversion ratio= #convertible shares
 MVE= STOK PRICE x total fully diluted shares

M&A

 Control Premium= (M&A agreed share price) x (share closed price at 1 or 30 days) – 1
 Stock value per share= Exchange ratio x stock price
o Total consideration per share= CASH + Stock value per share
o Implied Enterprise value of transaction=total consideration per share x # shares=Implied Equity purchase price +debt – cash

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