# financial formulas

 Aggressive financing Plan High Risk/ProfitLow Liquidity/Short term financing Conservitive Financing Plan Low Profit/RiskLong Term financing/High Liquidity Moderate financing plan Moderate Profit/RiskShort term financing with High Liquidity or Long term financing with Low Liquidity % of Working Capital (current assets - Current Liabilities)divided bySales Cost of failing to take cash discount Discount %/(100% - discount %) times360/ (final due date - discount period) Effective Rate Reg Loan interest/principal timesdays in the year (360)/ days outstanding on loan Effective Rate Discount Loan interest/(principal - interest)timesdays in the year(360)/days outstanding Effective rate w/ compensating balance (given rate) stated rate/(1-% compensating balance) Effective rate with compensating balance (given \$\$ amounts) interest/(principal - compensating balance in \$)timesyear (360)/days loan outstanding effecitve rate on installment loans (2 X annual # of payments X interest) divided by(total # of payments +1) times principle Ratio of bad debt to credit sales \$ of bad debt loss/\$ of credit sales sales to ar turnover sales/turnover ROI for credit decision I is AR so net income/ AR Economic Order Quantity (EOQ) sqrt ((2*S*O)/C)S is sales in unitsO is ordering costC is carrying cost per units Average Inventory EOQ/2 Average inventory with safety stock (EOQ)/2 + Safety stock Total cost for inventory Order costs = units sold/order sizeCarrying cost - Avg inv in units X carrying cost per unitorder cost + carrying cost future value - single amount FV = PV X FVifFV = PV X (1+i)^n table future value of \$1 present value - single amount PV=FV X PVifPV = FV X (1/(1+i)^n) table present value of \$1 future value - annuity FVa=A(FVifa)FVa = A[((1+i)^n-1)/i] future value of annuity Present value - annuity PVa=A(PVifa)PVa = A[(1-(1/(1+i)^n)/i] table present value of annuity annuity equaling a future amount A = FVa/((1+i)^n-1)i)A = FVa/FVifa table future value of annutiy annuity equaling a present value A=PVa/(1-(1/(1+i)^n))/iA=PVa/PVifa table present value of annuity how to figure annuity when more than one payment/investment in a year n = number of years X # of compunding periods per yeari = annual interest rate/# of compounding periods in a year Authorwsrdpc ID82315 Card Setfinancial formulas Descriptionexam 2 formulas Updated2011-04-28T01:45:28Z Show Answers