Formula sheet
Chapter 3
𝑨𝒔𝒔𝒆𝒕𝒔 = 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 + 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 ′ 𝑒𝑞𝑢𝑖𝑡𝑦
𝑰𝒏𝒄𝒐𝒎𝒆 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑠 − 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠
𝑪𝒂𝒔𝒉 𝒇𝒍𝒐𝒘 𝒇𝒓𝒐𝒎 𝒂𝒔𝒔𝒆𝒕𝒔 = 𝐶𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑡𝑜 𝑐𝑟𝑒𝑑𝑖𝑡𝑜𝑟𝑠 + 𝐶𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑡𝑜 𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠
𝑻𝒐𝒕𝒂𝒍 𝒄𝒂𝒔𝒉 𝒇𝒍𝒐𝒘 = 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 − 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑁𝑊𝐶 − 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝒄𝒂𝒑𝒊𝒕𝒂𝒍 𝒊𝒏𝒕𝒆𝒏𝒔𝒊𝒕𝒚 =
𝑠𝑎𝑙𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝒒𝒖𝒊𝒄𝒌 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑐𝑎𝑠ℎ
𝒄𝒂𝒔𝒉 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
365 𝑑𝑎𝑦𝑠
𝒅𝒂𝒚𝒔′ 𝒔𝒂𝒍𝒆𝒔 𝒊𝒏 𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔 =
𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
𝑠𝑎𝑙𝑒𝑠
𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝒕𝒐𝒕𝒂𝒍 𝒅𝒆𝒃𝒕 𝒓𝒂𝒕𝒊𝒐 = =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
𝒅𝒆𝒃𝒕 𝒆𝒒𝒖𝒊𝒕𝒚 𝒓𝒂𝒕𝒊𝒐 =
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝒆𝒒𝒖𝒊𝒕𝒚 𝒎𝒖𝒍𝒕𝒊𝒑𝒍𝒊𝒆𝒓 = = 1 + 𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝐸𝐵𝐼𝑇
𝒕𝒊𝒎𝒆𝒔 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒆𝒂𝒓𝒏𝒆𝒅 𝒓𝒂𝒕𝒊𝒐 =
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
1
, 𝐸𝐵𝐼𝑇 + 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
𝒄𝒂𝒔𝒉 𝒄𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒂𝒕𝒊𝒐 =
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝒑𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏 =
𝑠𝑎𝑙𝑒𝑠
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑹𝑶𝑨 =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑹𝑶𝑬 =
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 𝑆𝑎𝑙𝑒𝑠 𝑎𝑠𝑠𝑒𝑡𝑠
𝑫𝒖 𝑷𝒐𝒏𝒕 𝑰𝒅𝒆𝒏𝒕𝒊𝒕𝒚: 𝑹𝑶𝑬 = × ×
𝑠𝑎𝑙𝑒𝑠 𝑎𝑠𝑠𝑒𝑡𝑠 𝑒𝑞𝑢𝑖𝑡𝑦
𝑐𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑
𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
365 𝑑𝑎𝑦𝑠
𝒅𝒂𝒚𝒔′ 𝒔𝒂𝒍𝒆𝒔 𝒊𝒏 𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 =
𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
𝑠𝑎𝑙𝑒𝑠
𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑎𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑷/𝑬 𝒓𝒂𝒕𝒊𝒐 =
𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝒎𝒂𝒓𝒌𝒆𝒕 𝒕𝒐 𝒃𝒐𝒐𝒌 𝒓𝒂𝒕𝒊𝒐 =
𝑏𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝒏𝒆𝒕 𝒘𝒐𝒓𝒌𝒊𝒏𝒈 𝒄𝒂𝒑𝒊𝒕𝒂𝒍 = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠;
2
Chapter 3
𝑨𝒔𝒔𝒆𝒕𝒔 = 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 + 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 ′ 𝑒𝑞𝑢𝑖𝑡𝑦
𝑰𝒏𝒄𝒐𝒎𝒆 = 𝑅𝑒𝑣𝑒𝑛𝑢𝑒𝑠 − 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠
𝑪𝒂𝒔𝒉 𝒇𝒍𝒐𝒘 𝒇𝒓𝒐𝒎 𝒂𝒔𝒔𝒆𝒕𝒔 = 𝐶𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑡𝑜 𝑐𝑟𝑒𝑑𝑖𝑡𝑜𝑟𝑠 + 𝐶𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 𝑡𝑜 𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠
𝑻𝒐𝒕𝒂𝒍 𝒄𝒂𝒔𝒉 𝒇𝒍𝒐𝒘 = 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑐𝑎𝑠ℎ 𝑓𝑙𝑜𝑤 − 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑁𝑊𝐶 − 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝑠𝑝𝑒𝑛𝑑𝑖𝑛𝑔
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝒄𝒂𝒑𝒊𝒕𝒂𝒍 𝒊𝒏𝒕𝒆𝒏𝒔𝒊𝒕𝒚 =
𝑠𝑎𝑙𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
𝒄𝒖𝒓𝒓𝒆𝒏𝒕 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝒒𝒖𝒊𝒄𝒌 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑐𝑎𝑠ℎ
𝒄𝒂𝒔𝒉 𝒓𝒂𝒕𝒊𝒐 =
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
365 𝑑𝑎𝑦𝑠
𝒅𝒂𝒚𝒔′ 𝒔𝒂𝒍𝒆𝒔 𝒊𝒏 𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔 =
𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
𝑠𝑎𝑙𝑒𝑠
𝒕𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝒕𝒐𝒕𝒂𝒍 𝒅𝒆𝒃𝒕 𝒓𝒂𝒕𝒊𝒐 = =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
𝒅𝒆𝒃𝒕 𝒆𝒒𝒖𝒊𝒕𝒚 𝒓𝒂𝒕𝒊𝒐 =
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝒆𝒒𝒖𝒊𝒕𝒚 𝒎𝒖𝒍𝒕𝒊𝒑𝒍𝒊𝒆𝒓 = = 1 + 𝐷𝑒𝑏𝑡 𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝐸𝐵𝐼𝑇
𝒕𝒊𝒎𝒆𝒔 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒆𝒂𝒓𝒏𝒆𝒅 𝒓𝒂𝒕𝒊𝒐 =
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
1
, 𝐸𝐵𝐼𝑇 + 𝑑𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
𝒄𝒂𝒔𝒉 𝒄𝒐𝒗𝒆𝒓𝒂𝒈𝒆 𝒓𝒂𝒕𝒊𝒐 =
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝒑𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏 =
𝑠𝑎𝑙𝑒𝑠
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑹𝑶𝑨 =
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑹𝑶𝑬 =
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
𝑛𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 𝑆𝑎𝑙𝑒𝑠 𝑎𝑠𝑠𝑒𝑡𝑠
𝑫𝒖 𝑷𝒐𝒏𝒕 𝑰𝒅𝒆𝒏𝒕𝒊𝒕𝒚: 𝑹𝑶𝑬 = × ×
𝑠𝑎𝑙𝑒𝑠 𝑎𝑠𝑠𝑒𝑡𝑠 𝑒𝑞𝑢𝑖𝑡𝑦
𝑐𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑
𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
365 𝑑𝑎𝑦𝑠
𝒅𝒂𝒚𝒔′ 𝒔𝒂𝒍𝒆𝒔 𝒊𝒏 𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 =
𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
𝑠𝑎𝑙𝑒𝑠
𝒓𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔 𝒕𝒖𝒓𝒏𝒐𝒗𝒆𝒓 =
𝑎𝑐𝑐𝑜𝑢𝑛𝑡𝑠 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑷/𝑬 𝒓𝒂𝒕𝒊𝒐 =
𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑚𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝒎𝒂𝒓𝒌𝒆𝒕 𝒕𝒐 𝒃𝒐𝒐𝒌 𝒓𝒂𝒕𝒊𝒐 =
𝑏𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝒏𝒆𝒕 𝒘𝒐𝒓𝒌𝒊𝒏𝒈 𝒄𝒂𝒑𝒊𝒕𝒂𝒍 = 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠;
2
