C214 Sidebar Formulas to practice Math Financial Management (Western Governors University)

C214 Sidebar Formulas to
practice Math


Financial Management
(Western Governors
University)

, Formulas for Financial Management C214
Statement of Cash Flows
CFO = Net Income + Depreciation Expense – Increase in
NWC NWC = Current Assets minus Current
Liabilities
CFF = Increase in LT Debt (bonds) + Increase in Stock – Dividends Paid
CFI = (Change in Gross PPE) x (-1)
= (Change in Net PPE + Depreciation Expense) x (-1)
Financial Ratios
Current Ratio = Current Assets / Current Liabilities
Quick Ratio = (Current Assets - Inventory) / Current
Liabilities Accounts Receivable (AR) Turnover = Credit
Sales / AR Average Collection Period (ACP) = 365 / AR
Turnover Inventory Turnover = COGS / Inventory:
Days on Hand (DOH) = 365 / Inventory Turnover
Total Asset Turnover (TAT) = Sales / Total Assets
payr Fixed Asset Turnover (FAT) = Sales/Fixed
Assets Debt Ratio = Total Liabilities / Total Assets
The Times Interest Earned Ratio (TIE) = EBIT / Interest Expense
Financial Leverage Ratio (FLR) = Total Assets / Equity
Return on Assets (ROA) = Net Income / Total Assets
Return on Equity (ROE) = Net Income / Equity
Gross Margin = Gross Profit /
Sales Operating Margin = EBIT /
Sales Net Margin = Net Income /
Sales
Dividend Payout Ratio = Dividends Paid / Net Income
Dupont: ROE =
(Net Income / Sales) × (Sales / Total Assets) × (Assets /
Equity) Dividend Yield: Dividend Per Share / Stock Price
Price/Earnings (P/E) = Stock price / Earnings per
Share
Net Income, Retained Earnings, & Cash Flow
Net Income = Dividends Paid + Addition to Retained Earnings
Ending Retained Earnings = Beginning Retained Earnings + Net Income – Dividends Paid

Cash Flow = Net Income + Depreciation