Financial Management Formulas - Test 1

NOPAT (Net Operating Profit After Tax)

= EBIT(1 - T)

NCF (Net Cash Flow)

= NI + Depreciation

OCF (Operating Cash Flow)

= NOPAT + Depreciation

After-tax Yield (Interest Income)

= Before-tax Yield(1 - T)

After-tax Yield (Dividend Income)

= Before Tax Yield — (Before-tax Yield)(.30)(T)

Current Ratio

= Current Assets / Current Liabilities

Quick Ratio

= (Current Assets - Inventory) / Current Liabilities

Inventory Turnover

= Cost of Goods Sold / Inventory

DSO (Days Sales Outstanding)

= Accounts Receivable / (Sales / 365)

Fixed Asset Turnover

= Sales / Fixed Assets

Total Asset Turnover

= Sales / Total Assets

Debt Ratio

= Total Liabilities / Total Assets

Equity Ratio

= Total Equity / Total Assets

Equity Multiplier

= Total Assets / Total Equity

TIE (Times Interest Earned)

= EBIT / Interest Expense

Profit Margin

= Net Income / Sales

ROA (Return on Assets)

= Net Income / Total Assets

ROE (Return on Equity)

= Net Income / Total Equity

P/E Ratio (Price to Earnings Ratio)

= Price Per Share / Earnings Per Share

Market to Book

= Price Per Share / Book Value Per Share

DuPont Equation (ROA)

= Profit Margin x Total Asset Turnover Extended

DuPont Equation (ROE)

= Profit Margin x Total Asset Turnover x Equity Multiplier

Book Value Per Share (Part of M/B Ratio)

= Common Equity / Shares Outstanding