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com EdQuest Formula Sheets

Formula Sheet: Part I

Financial Statement:
1. Profit After Tax= Revenues - Expenses.
2. Profit Before Tax = Revenue – (Cost of
Goods Sold – Depreciation Expense –
Operating Expense –Interest Expense)
3. Net Cash Flow= Profit After Tax +
Depreciation + Amortization.
10. Free Cash Flow (FCF) = NOPAT – Net
Investment in Operating Capital. OR
11. FCF= (NOPAT + Depreciation) – Gross
Investment in Operating Capital.
12. Return On invested Capital=
!"#$%
"&'()*+,- /)&+*)0
Structural Ratios:
1. 𝑫𝒆𝒃𝒕 −
𝑻𝒐𝒕𝒂𝒍 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 (𝑫𝒆𝒃𝒕)
𝒆𝒒𝒖𝒊𝒕𝒚 𝑹𝒂𝒕𝒊𝒐 = 𝑺𝒉𝒂𝒓𝒆𝒉𝒐𝒍𝒅𝒆𝒓𝒔 𝑭𝒖𝒏𝒅𝒔(𝑬𝒒𝒖𝒊𝒕𝒚)
2. 𝑫𝒆𝒃𝒕 − 𝑨𝒔𝒔𝒆𝒕 𝑹𝒂𝒕𝒊𝒐 =
𝑫𝒆𝒃𝒕(𝒂𝒍𝒍, 𝒍𝒐𝒏𝒈 𝒕𝒆𝒓𝒎 𝒂𝒏𝒅 𝒔𝒉𝒐𝒓𝒕 𝒕𝒆𝒓𝒎)
𝑨𝒔𝒔𝒆𝒕𝒔(𝑩𝒂𝒍𝒂𝒏𝒄𝒆 𝒔𝒉𝒆𝒆𝒕 𝒕𝒐𝒕𝒂𝒍)

4. Net Cash Flow= Profit After Tax – Non- Financial Ratios: Coverage Ratios:
cash Revenue + Non-cash Expense.
Liquidity Ratios: 3. 𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝑪𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒂𝒕𝒊𝒐 =
5. Net Operating Profit After Tax
𝑷𝒓𝒐𝒇𝒊𝒕 𝒃𝒆𝒇𝒐𝒓𝒆 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒂𝒏𝒅 𝒕𝒂𝒙𝒆𝒔
(NOPAT)= (PBT + Interest -Other 1. 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑹𝒂𝒕𝒊𝒐 = 𝑰𝒏𝒕𝒆𝒓𝒆𝒔𝒕
Expense) (1 - Tax Rate) 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔
6. Operating Income = Revenue – (Cost of 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
4. 𝑭𝒊𝒙𝒆𝒅 𝑪𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒂𝒕𝒊𝒐 =
Goods Sold – Depreciation Expense – 2. 𝑨𝒄𝒊𝒅 −
Operating Expense) 𝑃𝐵𝐼𝑇𝐷𝐴
𝑸𝒖𝒊𝒄𝒌 𝑨𝒔𝒔𝒆𝒕𝒔 𝑅𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑜𝑓 𝐿𝑜𝑎𝑛
7. Earnings Before Interest and Taxes 𝒕𝒆𝒔𝒕 𝒓𝒂𝒕𝒊𝒐 = 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔. 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 + 1 − 𝑇𝑎𝑥 𝑅𝑎𝑡𝑒
(EBIT)= Revenue – (Cost of Goods Sold –
(Also called as Quick Ratio) 5. 𝑫𝒆𝒃𝒕 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 𝑪𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝑹𝒂𝒕𝒊𝒐 =
Depreciation Expense – Operating
Expense) + Other Income 3. 𝑪𝒂𝒔𝒉 𝑹𝒂𝒕𝒊𝒐 = #(pq+* $q*'( %)r'stut
,p,vw)sx wx)(-'t
8. Net Income= EBIT – Interest Expense – 𝑪𝒂𝒔𝒉 𝒂𝒏𝒅 𝒃𝒂𝒏𝒌 𝒃𝒂𝒍𝒂𝒏𝒄𝒆𝒔 + y,*'('s* p, *'(z 0p),t{')s' |',*)0s
Taxes. 𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒊𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕𝒔 y,*'('s* p, *'(z 0p),st
0')s' |',*)0st|'&)}z',* pq *'(z 0p),s
9. Earnings Before Interest, Taxes, 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔.
Depreciation and Amortization Leverage Ratios:
(EBITDA) = Net Income + Interest +
Taxes + Depreciation + Amortization.
Turnover Ratios
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1. Inventory Turnover Ratio=
|'~',•'s q(pz "&'()*+p,s
$~'()-' y,~',*p(}
2. Debtor’s Turnover Ratio=
!'* /('€+* •)0's
$~'()-' |'w'+~)‚0's
3. Average Collection Period=
$~'()-' %()€' |'w'+~)‚0's
$~'()-' u)+0} /('€+* •)0's
4. Fixed Asset Turnover=
|'~',•' ƒ(pz "&'()*+p,s
$~'()-' !'* ƒ+r'€ $ss'*s
5. Total Asset Turnover =
%p*)0 |'~',•'s
$~'()-' %p*)0 $ss'*
Profitability Ratios:
Profit Margin Ratios:
1. 𝑮𝒓𝒐𝒔𝒔 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏 𝑹𝒂𝒕𝒊𝒐 =
†(pss #(pq+*
|'~',•'s q(pz "&'()*+p,s
2. 𝑶𝒑𝒆𝒓𝒂𝒕𝒊𝒏𝒈 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏 𝑹𝒂𝒕𝒊𝒐 =
"&'()*+,- #(pq+*
!'* |'~',•'s q(pz "&'()*+p,s
EdQuest Formula Sheets
3. 𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕 𝑴𝒂𝒓𝒈𝒊𝒏 𝑹𝒂𝒕𝒊𝒐 = 4. Market Value to Book Value Ratio=
#(pq+* $q*'( *)r's •)(‘'* /)&+*)0+s)*+p,
%p*)0 ('~',•'s %p*)0 ‹pp‘ “)0•'
Rate of Return Ratio:
1. 𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑨𝒔𝒔𝒆𝒕𝒔 =
#(pq+* $q*'( %)r
$~'()-' %p*)0 $ss'*s
2. 𝑬𝒂𝒓𝒏𝒊𝒏𝒈 𝑷𝒐𝒘𝒆𝒓 =
#(pq+* ‹'qp(' +,*'('s* ),€ *)r
$~'()-' %p*)0 )ss'*s
3. 𝑹𝑶𝑪𝑬 =
#(pq+* ‚'qp(' +,*'('s* ),€ *)r(Œv*)r ()*')
$~'()-' %p*)0 $ss'*s
•Ž•+*} •)(,+,-s
4. 𝑹𝑶𝑬 = $~'()-' •Ž•+*}
Valuation Ratios:
u+~+€',€t#(+w' /x),-'
1. 𝒀𝒊𝒆𝒍𝒅 = y,+*+)0 #(+w'
2. 𝑷𝒓𝒊𝒄𝒆 − 𝒆𝒂𝒓𝒏𝒊𝒏𝒈 𝒓𝒂𝒕𝒊𝒐 =
•)(‘'* #(+w' #'( sx)('
•)(,+,-s &'( sx)('
3. 𝑬𝑽 − 𝑬𝑩𝑰𝑻𝑫𝑨 𝑹𝒂𝒕𝒊𝒐 =
𝑬𝒏𝒕𝒆𝒓𝒑𝒓𝒊𝒔𝒆 𝒗𝒂𝒍𝒖𝒆
𝑬𝑩𝑰𝑻𝑫𝑨
(EV=Market capitalisation + Total Debt – Cash)