Financial Formulas

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Flashcards for financial formulas and concepts.

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7 Terms

1
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Market Value Added (MVA)

MVA = Spread × Capital

2
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Spread

Spread = ROIC – WACC

3
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Return on Invested Capital (ROIC)

ROIC = NOPAT / Invested Capital

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NOPAT

NOPAT = EBIT × (1 – Tax Rate)

5
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Return on Invested Capital (Operating Breakdown)

ROIC = Operating Margin × Turnover

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Operating Margin

EBIT / Sales

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Capital Turnover

Sales / Capital