FORMULAS FOR IFIC STUDY GUIDE
Consumer Price Index (CPI) - Answers -[(CPI current - CPI Past) / CPI Past] x 100
Current Yield - Answers -Annual Cash Flow / Current Market Price x 100 or seven day
yield x 365/7
Approx Yield to Maturity - Answers -[interest income +/- price change per compounding
period / (purchase price + par value)/2 ] x 100
Pp (current market value of preffered shares) - Answers -Dividend (annual) / ip (annual
yield currently offered on preffered shares)
expected Returns - Answers -cash flow + capital gains
Real Return - Answers -nominal rate - rate of inflation
Return % - Answers -Cash Flow + Capital Gains / beginning value x 100
artithmetic mean return - Answers -R1 + R2 + R... / T (number of returns)
Geometric Return - Answers -([(1+R1) x (1+R2) x (1+Rn)] ^ 1/T )- a
portfolio Return - Answers -R1(W1) + R2(W2) + Rn(Wn)
Working Capital / Current Ratio - Answers -Current Assets / Current Liabilities
Quick Ratio - Answers -(Current Assets - Inventory) / Current Liabilities
Debt / Equity Ratio - Answers -Total Debt/Total Equity
Cash Flow from operations / Total debt ratio - Answers -Cash Flow From Ops / Total
outstanding debt
Interest Coverage Ratio - Answers -EBIT/ interest expense
Gross Profit Margin - Answers -(Revenue - COGS) / Revenue
Net Profit Margin - Answers -Profit / Revenue
Net (or after tax) Return on Common Equity - Answers -Profit / Equity
Inventory Turnover Ratio - Answers -Cost of Sales / Invesntory
Consumer Price Index (CPI) - Answers -[(CPI current - CPI Past) / CPI Past] x 100
Current Yield - Answers -Annual Cash Flow / Current Market Price x 100 or seven day
yield x 365/7
Approx Yield to Maturity - Answers -[interest income +/- price change per compounding
period / (purchase price + par value)/2 ] x 100
Pp (current market value of preffered shares) - Answers -Dividend (annual) / ip (annual
yield currently offered on preffered shares)
expected Returns - Answers -cash flow + capital gains
Real Return - Answers -nominal rate - rate of inflation
Return % - Answers -Cash Flow + Capital Gains / beginning value x 100
artithmetic mean return - Answers -R1 + R2 + R... / T (number of returns)
Geometric Return - Answers -([(1+R1) x (1+R2) x (1+Rn)] ^ 1/T )- a
portfolio Return - Answers -R1(W1) + R2(W2) + Rn(Wn)
Working Capital / Current Ratio - Answers -Current Assets / Current Liabilities
Quick Ratio - Answers -(Current Assets - Inventory) / Current Liabilities
Debt / Equity Ratio - Answers -Total Debt/Total Equity
Cash Flow from operations / Total debt ratio - Answers -Cash Flow From Ops / Total
outstanding debt
Interest Coverage Ratio - Answers -EBIT/ interest expense
Gross Profit Margin - Answers -(Revenue - COGS) / Revenue
Net Profit Margin - Answers -Profit / Revenue
Net (or after tax) Return on Common Equity - Answers -Profit / Equity
Inventory Turnover Ratio - Answers -Cost of Sales / Invesntory