Formulas Flashcards
book value per share (ch 6)
= total book value of comm. equity / # of comm. shares outstanding
(e.g. par value of $200 + $400 in RE + $4,000 APIC = $4,600… / 200 shares outstanding = $2.30 book value per share.
earnings credit calculation (ch 7)
= avg. collected bals x (1 - reserve requirement) x [ECR x (# days in a month/365)]
OR
= avg. collected bals x (1 - reserve requirement) x (ECR/12)
avg. collected balance required
(to exactly offset bank charges with earnings credit) (ch 7)
= monthly svc. charges /
[(ECR/ 12 mos.) x (1 - reserve requirement)]
avg. ledger balance (ch 7)
= daily ending ledger bals (net of any current-period adjustments) / # of days in analysis period
avg. deposit float (ch 7)
= sum of daily $ amt of items in process of collection / # of days* in analysis period
*can be calendar or business days)
avg. collected balance (ch 7)
= sum of daily ending collected bals. / # of days in analysis period
usually…
= avg. ledger bal - avg. deposit float
debt to tangible net worth (ch 9)
= total debt /
(total equity - intangibles)
return on investment (ROI) (ch 9)
= NI /
(LT debt + equity)
to determine future value (ch 9)
degree of financial leverage (ch 9)
= % change in NI / % change in EBIT
always: % change = (current - prior) / prior
net profit margin (aka “return on sales”) (ch 9)
= NI / revenue
net present value (ch 9)
(e.g. NPV of a project calc.)
rtn on common equity (ch 9)
EBITDA margin (unit 3)
a measure of operating profitability
= EBITDA (earnings before interest, taxes, depreciation, and amortization)/ total revenues
fixed asset turnover ratio (unit 3)
= revenues / net PPE
ratio that measures efficiency/use of FAs (i.e. PPE)
calculate effective annual cost of a CP issuance (ch 13)
