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Formulae

The document outlines key financial formulas and ratios used in accounting and finance, including calculations for revenue, profit margins, cash flow, and equity metrics. It provides formulas for various levels of profit such as EBITDA, EBIT, and NPAT, as well as ratios like gross margin, current ratio, and debt-to-equity ratio. Additionally, it includes metrics for cash flow and valuation methods like DCF and enterprise value.

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rahulsaini1728
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7 views2 pages

Formulae

The document outlines key financial formulas and ratios used in accounting and finance, including calculations for revenue, profit margins, cash flow, and equity metrics. It provides formulas for various levels of profit such as EBITDA, EBIT, and NPAT, as well as ratios like gross margin, current ratio, and debt-to-equity ratio. Additionally, it includes metrics for cash flow and valuation methods like DCF and enterprise value.

Uploaded by

rahulsaini1728
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Assets = Liabilities + Shareholders’ Equity

Level Formula

Revenue (Sales) —

Gross Profit Revenue − COGS

Gross Profit − Operating Expenses


EBITDA (excluding Depreciation &
Amortization)

EBIT (Operating Profit) EBITDA − Depreciation − Amortization

EBT (Profit Before Tax) EBIT − Interest Expense

NOPAT EBIT × (1 − Tax Rate)

NPAT / PAT (Net Profit After Tax) EBT × (1 − Tax Rate)


Earnings Per Share (EPS) NPAT ÷ Number

Ratio Formula

Gross Margin (Gross Profit ÷ Revenue) × 100

Operating Margin (EBIT ÷ Revenue) × 100

EBITDA Margin (EBITDA ÷ Revenue) × 100

Net Profit Margin (NPAT ÷ Revenue) × 100

Ratio Formula
Current Ratio Current Assets ÷ Current Liabilities
(Current Assets − Inventory) ÷
Quick Ratio
Current Liabilities
Debt-to-Equity
Total Debt ÷ Shareholders’ Equity
Ratio
Interest Coverage
EBIT ÷ Interest Expense
Ratio
Inventory
COGS ÷ Average Inventory
Turnover
Asset Turnover Revenue ÷ Average Total Assets
NPAT ÷ Average Shareholders’
ROE
Equity
ROA NPAT ÷ Average Total Assets
ROCE NOPAT ÷ (Debt + Equity)
Level Formula

Metric Formula
OCF (Operating Net Profit + Non-Cash Items ±
Cash Flow) ΔWorking Capital
FCF (Free Cash
OCF − CapEx
Flow)
EBIT × (1 − Tax Rate) +
FCFF (Free Cash
Depreciation − CapEx −
Flow to Firm)
ΔWorking Capital
FCFE (Free Cash FCFF − Interest × (1 − Tax Rate) +
Flow to Equity) Net Borrowing
OCF − CapEx + Net Borrowing −
or
Debt Repayment

Flow Formula

Retained Earnings Opening RE + Net Profit − Dividends

Ending Cash = Opening Cash + CFO +


Cash Flow Link
CFI + CFF

(Current Assets − Current Liabilities)ₜ −


Change in Net Working Capital
(Current Assets − Current Liabilities)ₜ₋₁

Cost of Equity (CAPM) rₑ = r_f + β (r_m − r_f)

Enterprise Value (EV) Market Cap + Total Debt − Cash

DCF Firm Value Σ [FCFFₜ ÷ (1 + WACC)ᵗ]

DCF Equity Value Firm Value − Debt + Cash

EV/EBITDA Enterprise Value ÷ EBITDA

P/E Ratio Price per Share ÷ EPS

PEG Ratio (P/E) ÷ Earnings Growth

Dividend Payout Ratio Dividend ÷ NPAT

Retention Ratio 1 − Payout Ratio

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