Collection of formulas – Mid-term exam 2

Profitability Index (PI):

Current stock price: 𝑃𝑉 𝑜𝑓 𝐹𝑢𝑡𝑢𝑟𝑒 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤
PI =
𝐶0

ROI = Margin * Turnover

Current stock price with growth:

ROE = Net income/Average stockholders’
equity

Working capital = CA –CL

Market capitalization rate:

Current ratio = CA / CL

EPS = Net income / Weighted-average

Net Present Value (NPV): number of shares outstanding

1 Price/Earnings Ratio = Market Price /

NPV = −C +
(1 + r) Earnings Per Share

CAPM: Cash dividends per share = Total cash

dividends / Weighted average shares
Requity = rf + B ( rm - rf ) outstanding

Dividend yield: Cash dividends per share /

Market price per share

Expected Portfolio Return  (x1 r1 )  ( x 2 r2 )

Portfolio Variance  x12σ12  x 22σ 22  2( x1x 2ρ12σ1σ 2 )

 Collection of formulas – Mid-term exam 2

Inventory turnover ratio =

Days in inventory =

Average receivable turnover =

Days in receivable =

Accounts payable deferral period =

Days in payables =

Operating cycle= Days in inventory + Days in receivables

Cash cycle = Operating cycle – Days in payables