EQUATIONS

Dividend yield

Annual dividend divided by price. Example: $2 / $40 = 5%.

Current bond yield

Annual coupon divided by market price. Example: $60 / $900 = 6.67%.

Tax-equivalent yield

Tax-free yield divided by (1 minus tax rate). Example: 4% / 0.68 = 5.88%.

Capital gain percent

(Sell minus buy) divided by buy. Example: ($55-$50)/50 = 10%.

Total return percent

(End minus start plus income) divided by start.

Net profit margin

Net income divided by revenue. Example: $150K / $500K = 30%.

EPS

(Net income minus preferred dividends) divided by shares. Example: $1M / 500K = $2.00.

P/E ratio

Price divided by EPS. Example: $80 / $4 = 20.

Market cap

Price times shares outstanding.

Margin equity

Market value minus the loan.

Rule of 72

Years to double = 72 divided by rate percent. Example: 72/9 = 8 years.

Bond points

1 point = $10. A bond at "97" = $970.

Conversion ratio

Par divided by conversion price. Example: $1

Profit from a P&L

(Sales times gross margin) minus operating expenses. Example: ($25

Dividends paid

Dividend per share times number of shares. Example: $1 x 100 = $100.

Future value

Present value times (1 + rate) to the power of time.