Samenvatting Formula sheet Finance and risk management

Formulas Corporate Finance
• Capital budgeting decisions = Long-term assets
• Capital structure decision = Long-term liabilities
• Working capital management = Short-term Assets and Liabilities
• NWC = Current Assets – Current Liabilities
• Net income = Total sales – Cost of sales (gross profit) – selling general &admin expenses – R&D – Depriciation & Amortization (Operating income) +
Other income (EBIT) - Interest Income expenses (Pretax Income) – Taxes
• Shareholder’s equity = Assets – Liabilities (Geen common stock & RE)
• Market value shareholders after credit = Market value Shareholders Equi – Obligation to creditors
• Operating Cash flow (1) = Net income + Depreciation & Amortization + Interest Expense – Δ Net working capital
• Operating Cash flow (2) = EBIT + Depreciation – Taxes - Δ Net working capital
• Owners equity = all assets – all liabilities
!"#$%"& ()#(*+%$,-(
• Depreciation expense = .("-/ $0$ *%($ 1((- &(2(*/ 2"$3""-


Cashflows:
• 𝑻𝒐𝒕𝒂𝒍 𝒄𝒂𝒔𝒉 𝒇𝒍𝒐𝒘 = 𝐶𝐹 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑎𝑐𝑡 = 𝐶𝐹 𝐼𝑛𝑣𝑒𝑠𝑡𝑖𝑛𝑔 𝑎𝑐𝑡 + 𝐶𝐹 𝑓𝑖𝑛𝑎𝑐𝑖𝑛𝑔 𝑎𝑐𝑡.
4
o 𝑪𝑭 𝒊𝒏𝒗𝒆𝒔𝒕𝒊𝒏𝒈 𝒂𝒄𝒕𝒊𝒗𝒊𝒕𝒊𝒆𝒔 = − 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 𝒆𝒙𝒑𝒆𝒅𝒊𝒕𝒖𝒓𝒆 𝑶𝒕𝒉𝒆𝒓 𝒊𝒏𝒗𝒆𝒔𝒕𝒊𝒏𝒈 𝒂𝒄𝒕𝒊𝒗𝒊𝒕𝒊𝒆𝒔
5

§ 𝑪𝑨𝑷𝑬𝑿 = (𝑁𝑒𝑡 𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠 (𝑃𝑃𝑃)𝑦 − 𝑁𝑒𝑡 𝐹𝑖𝑥𝑒𝑑 𝐴𝑠𝑠𝑒𝑡𝑠 (𝑃𝑃𝑃)𝑦 − 1) + 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 𝑦(∆ 𝑎𝑐𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑒𝑑 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛 𝑦)
o 𝑪𝑭 𝒇𝒊𝒏𝒂𝒏𝒄𝒊𝒏𝒈 𝒂𝒄𝒕𝒊𝒗𝒊𝒕𝒊𝒆𝒔 = 𝑪𝑭 𝒄𝒓𝒆𝒅𝒊𝒕𝒐𝒓𝒔 + 𝑪𝑭 𝒔𝒉𝒂𝒓𝒆𝒉𝒐𝒍𝒅𝒆𝒓𝒔
o 𝑪𝑭 𝒄𝒓𝒆𝒅𝒊𝒕𝒐𝒓𝒔 = `∆𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡 (𝑏𝑎𝑙𝑎𝑛𝑐𝑒 𝑠ℎ𝑒𝑒𝑡) − 𝐼𝑛𝑡𝑒𝑟𝑠𝑒𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒 (𝑖𝑛𝑐𝑜𝑚𝑒 𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡)d

, o 𝑪𝑭 𝒔𝒉𝒂𝒓𝒆𝒉𝒐𝒍𝒅𝒆𝒓𝒔 = (∆𝐶𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘 − 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑)

Ratios:
Financial short term
!,--(*$ "//($/
• 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒓𝒂𝒕𝒊𝒐 = !,--(*$ &%"3%&%$%(/
= 𝑔𝑒𝑛𝑜𝑒𝑔 𝑟𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑠 𝑜𝑚 𝑠ℎ𝑜𝑟𝑡 𝑡𝑒𝑟𝑚 𝑣𝑒𝑟𝑝𝑙𝑖𝑐ℎ𝑡𝑖𝑛𝑔 𝑡𝑒 𝑘𝑢𝑛𝑛𝑒𝑛 𝑣𝑜𝑙𝑑𝑜𝑒𝑛
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒂𝒔𝒔𝒆𝒕𝒔 – 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
• 𝑸𝒖𝒊𝒄𝒌 𝒓𝒂𝒕𝒊𝒐 =
𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
= 𝑏𝑒𝑡𝑎𝑙𝑒𝑛 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑧𝑜𝑛𝑑𝑒𝑟 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑒 𝑣𝑒𝑟𝑘𝑜𝑝𝑒𝑛 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑟𝑖𝑛𝑔𝑒𝑛 𝑛𝑜𝑑𝑖𝑔 𝑡𝑒 ℎ𝑒𝑏𝑏𝑒𝑛



Financial long term
F0$"& "//($/ – F0$"& (G,%$.
• 𝑻𝒐𝒕𝒂𝒍 𝒅𝒆𝒃𝒕 𝒓𝒂𝒕𝒊𝒐 = F0$"& "//($/
= 𝑝𝑟𝑜𝑝𝑜𝑟𝑡𝑖𝑒 𝑑𝑖𝑒 𝑑𝑜𝑜𝑟 𝑠𝑐ℎ𝑢𝑙𝑑𝑒𝑛 𝑔𝑒𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑒𝑟𝑑 𝑖𝑠
F0$"& +(3$
• 𝑫𝒆𝒃𝒕– 𝒆𝒒𝒖𝒊𝒕𝒚 𝒓𝒂𝒕𝒊𝒐 (𝒍𝒆𝒗𝒆𝒓𝒂𝒈𝒆) = F0$"& (G,%$. = 𝑑𝑒 𝑣𝑒𝑟ℎ𝑜𝑢𝑑𝑖𝑛𝑔 𝑡𝑢𝑠𝑠𝑒𝑛 𝑑𝑒𝑏𝑡 𝑒𝑛 𝑒𝑞𝑢𝑖𝑡𝑦 𝑜𝑚 𝑧𝑜 𝑑𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑡𝑒 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑒𝑟𝑒𝑛
F0$"& "//($/
• 𝑬𝒒𝒖𝒊𝒕𝒚 𝒎𝒖𝒍𝒕𝒊𝒑𝒍𝒊𝒆𝒓 = F0$"& (G,%$. = 𝑟𝑖𝑠𝑘 𝑚𝑒𝑡𝑒𝑟, ℎ𝑜𝑒𝑣𝑒𝑒𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛 𝑏𝑒𝑧𝑖𝑡 𝑣𝑎𝑛 𝑎𝑎𝑛𝑑𝑒𝑒𝑙ℎ𝑜𝑢𝑑𝑒𝑟𝑠
HIJF
• 𝑻𝒊𝒎𝒆𝒔 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒆𝒂𝒓𝒏𝒆𝒅 𝒓𝒂𝒕𝒊𝒐 = J*$(-(/$ = 𝑑𝑒 𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑜𝑚 𝑑𝑒𝑏𝑡 𝑣𝑒𝑟𝑝𝑙𝑖𝑐ℎ𝑡𝑖𝑛𝑔𝑒𝑛 𝑛𝑎 𝑡𝑒 𝑘𝑜𝑚𝑒𝑛 𝑚𝑒𝑡 ℎ𝑒𝑡 𝑖𝑛𝑘𝑜𝑚𝑒𝑛
HIJF 4 K(#-(L%"$%0*
• 𝑪𝒂𝒔𝒉 𝒄𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒂𝒕𝒊𝒐 = J*$(-(/$
= 𝑑𝑒 𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑜𝑚 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒𝑠 𝑡𝑒 𝑘𝑢𝑛𝑛𝑒𝑛 𝑏𝑒𝑡𝑎𝑙𝑒𝑛


Performance
M($ %*L01(
• 𝑷𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏 = N"&(/
= ℎ𝑜𝑒 𝑔𝑜𝑒𝑑 𝑝𝑟𝑒𝑠𝑡𝑒𝑒𝑟𝑑 ℎ𝑒𝑡 𝑏𝑒𝑑𝑟𝑖𝑗𝑓 𝑝𝑒𝑟 𝑠𝑎𝑙𝑒
M($ %*L01(
• 𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝒂𝒔𝒔𝒆𝒕𝒔 =
F0$"& "//($/
= 𝑟𝑒𝑡𝑢𝑟𝑛 𝑛𝑎𝑎𝑟 𝑎𝑙𝑙𝑒 𝑠𝑡𝑎𝑘𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠
M($ %*L01(
• 𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝒆𝒒𝒖𝒊𝒕𝒚 = F0$"& (G,%$.
= 𝑟𝑒𝑡𝑢𝑟𝑛 𝑛𝑎𝑎𝑟 𝑎𝑙𝑙𝑒𝑠 𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠
𝑵𝒆𝒕 𝒊𝒏𝒄𝒐𝒎𝒆
• 𝑬𝑷𝑺 =
𝑺𝒉𝒂𝒓𝒆𝒔 𝒐𝒖𝒕𝒔𝒕𝒂𝒏𝒅𝒊𝒏𝒈
= ℎ𝑜𝑒𝑣𝑒𝑒𝑙 𝑣𝑒𝑟𝑑𝑖𝑒𝑛𝑑 𝑒𝑙𝑘 𝑎𝑎𝑛𝑑𝑒𝑒𝑙 𝑑𝑎𝑡 𝑖𝑛 𝑑𝑒 𝑚𝑎𝑟𝑘𝑡 𝑠𝑡𝑎𝑎𝑡

, Market value
V-%L( #(- /W"-(
• 𝑷𝑬 𝒓𝒂𝒕𝒊𝒐 = H"-*%*X/ #(- /W"-(
Y"-Z($ 2"&,( #(- /W"-(
• 𝑴𝒂𝒓𝒌𝒆𝒕 − 𝒕𝒐 − 𝒃𝒐𝒐𝒌𝒓𝒂𝒕𝒊𝒐 = I00Z 2"&,( #(- /W"-(
= 𝑖𝑠 ℎ𝑒𝑡 𝑏𝑒𝑑𝑟𝑖𝑗𝑓 𝑢𝑛𝑑𝑒𝑟 𝑜𝑓 𝑜𝑣𝑒𝑟 𝑣𝑎𝑙𝑢𝑒𝑑 𝑡𝑒𝑛 𝑜𝑝𝑧𝑖𝑐ℎ𝑡𝑒 𝑣𝑎𝑛 𝑑𝑒 𝑏𝑒𝑛𝑐ℎ𝑚𝑎𝑟𝑘



Time value of money
VYF
• Present Value of perpetuity (PVp) = J*$(-(/$ ["$(

• Value of offer = PV perpetuity – PV annual payments for next x years
• Present value (PV) of all payments
=PV (Rate;Nper;Pmt)
=Pv (Interest rate; Number of payments; Payment per period)
𝒎∗𝒏 𝟏 𝒏
𝑭𝑽 𝟏−z {
𝑷𝑽 = v 𝒐𝒇 𝑷𝑽 = 𝑷𝑴𝑻 ∗ 𝟏+𝒓
𝒓x 𝒓
𝟏=
𝒎


• Payment (PMT) = What should be payed monthly/quaterly/yearly?
=PMT (Rate;Nper;Pv)
=PMT (Interest; number of payments; present value)
𝑃𝑉
𝑃𝑀𝑇 = 𝑜𝑓 𝑃𝑀𝑇 = 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 (𝑃𝑉 ∗ 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑟𝑎𝑡𝑒) + 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒
1 *
1 − z1 + 𝑟{
𝑟


• Rate (r) = What should be the interest rate to obtain a specific amount