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Finance Formulas

  1. EBIT

    (Definition and Formula)
    Earning Before Interset and Taxes

    net sales - costs (including depreciation)
  2. EBITDA

    (Definition)
    Earnings Before Interest, Taxes, Depreciation, Amortization
  3. EPS

    (D/F)
    earnings per share

    net income / common shares outstanding
  4. EVA

    (4 Formulas)
    Economic Value Added (short term)

    NOPAT - after tax dollar cost of capital used to support operations

    (EBIT(1 - tax rate)) - (total operating capital * WACC)

    (EBIT(1 - tax rate)) - (total operating capital * percent of after tax cost of capital)

    (operating capital)(ROIC - WACC)
  5. FCF

    (D/F-5)
    Free Cash Flow

    sales revenue - operating costs - operating taxes - required new investments in operating capital

    NOPAT - net investment in operating capital

    (NOPAT + Depreciation) - (Net investment in operating capital + depreciation)

    Operating cash flow - gross investment in operating capital

    Operating cash flow - gross investment in long trerm operating assets - Investment in NOWC
  6. GIC

    (D/F)
    Gross Investment in Capital

    net investment capital + depreciation
  7. MVA

    (D/F-4)
    Market Value Added (Long Term)

    market value of stock - equity capital supplied by shareholders

    (shares outstanding * stock price) - total common equity

    total market value - total investor supplied capital

    (market value of stock + market value of debt) - total supplied investor capital
  8. NCF

    (D/F-2)
    Net Casf Flow

    Net income + noncash revenues + noncash charges

    net income + depreciation + amortization
  9. NOC

    (D/F)
    Net Operating Capital

    NOWC + operating long term assets
  10. NOWC
    Net Operating Working Capital

    Operating Current Assets - Operating Current Liabilities

    Does not include any asset or liability that charges interest
  11. OCF

    (D/F)
    Operating Cash Flow

    NOPAT + Depreciation
  12. ROI

    (D/F)
    Return on Investment

    • $ after taxes
    • $ of investment
  13. ROIC

    (D/F)
    Return On Invested Capital

    • NOPAT
    • Operating Capital
  14. WACC

    (D/F)
    Weighted Average Cost of Capital

    • FCF1 + FCF2 + ...
    • (1 + WACC)1 (1 + WACC)2
  15. NI

    (D/F-2)
    Net Income

    EBIT - Interest - Taxes

    EBITDA - Depreciation - Amortization - Interest - Taxes
  16. NIOC

    (D/F)
    Net Investment in Operating Capital

    Net Operating CaptialEnd - Net Operating CapitalBegin
  17. Personal Bond Yield

    (F)
    (1 - Tax Rate) * (Bond Rate)
  18. Taxes

    (F)
    EBIT * (1 - Tax Rate)
  19. Dividends
    Retained EarningsBeg + Net Income - REEnd
Author
Anonymous
ID
61389
Card Set
Finance Formulas
Description
Intro Formulas
Updated

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