BYU FIN 201 Midterm 1 Equations

Current Ratio

Current Assets / Current Liabilities

Quick Ratio

(Current Assets - Inventory) / Current Liabilities

Average Collection

AR / Daily Credit Sales

AR Turnover

Sales / AR

Inventory Turnover

COGS / Inventory

Total Asset Turnover

Sales / Total Assets

Fixed Asset Turnover

Sales / Fixed Assets

OIROI

Operating Income (EBIT) / Total Assets

Debt Ratio

Debt / Assets

Times Interest Earned

Operating Income (EBIT) / Interest Expense

Return on Assets

NI / Assets

Return on Equity

NI / Equity

Gross Margin

Gross Profit / Sales

Operating Margin

Operating Income (EBIT) / Sales

Net Margin

NI / Sales

DuPont

NI/Sales x Sales/Assets x Assets/Equity

Debt to Equity

Debt / Equity

CapEx (Capital Expenditure)

(Gross Fixed Assets)t - (Gross Fixed Assets)t-1

Change in NWC

(Current Assets - Current Liabilities)t - (Current Assets - Current Liabilities)t-1

Free Cash Flow to the Firm

EBIT - Taxes + Depreciation - CAPEX - Change in NWC

Free Cash Flow to Equity Holders

NI + Depreciation - CapEx - Change in NWC + Net LTD

Discounted Cash Flow

(CF)t / (1+r)t

EVA

NOPAT - [WACC x Costly Capital]

NOPAT

EBIT - Taxes

Costly Capital

All interest-bearing debt + equity.