NPV = PV(inflows) – PV(outflows)

Cash conversion cycle = (Average days of receivables) + (Average days of inventory) – (Average days of payables)

Quick Ratio OR Acid Test Ratio = $\frac{Cash+Short Term marketable Securities+receivables}{Current Liabilities}$

Sharpe ratio (Reward to variability ratio/SR) = $\frac{R_p-R_f}{{\sigma }_p}$

Diversification Ratio = $\frac{Risk of equally weighted portfolio{ of}_{}\text{'}n\text{'}securities}{Risk of \sin gle security at random{ from}_{}\text{'}n\text{'}securities}$

${\rho }_{(}x,y)$ = $\frac{Cov(x,y)}{{\sigma }_x{\sigma }_y}$

Leveraged Return = $\frac{{\displaystyle \frac{gain}{loss }}on Total Investment}{Investo{r}^{\text{'}}s CashInvestment}$

$Single factor model:E\left(R_i\right)-R_f$ = ${\beta }_i\times \left[E\right(R_m)-R_f]$

$Risk free portfolio:W_A$ = $\frac{{\sigma }_B}{{\sigma }_A+{\sigma }_B}$

Jensen’s Alpha = $R_p-CAPM$

Nfirm = $\sum (market share)$

National Income = Compensation of Employees (Wages/COE) + Interest Income + Rent + Corporate & Govt. Enterprise Profit before Taxes+ Unincorporated Business Net Income + Indirect Business Taxes – Subsidies

Personal Disposable Income = Personal Income – Personal Taxes

Policy rate = neutral + ½ (actual target) growth + ½ (actual - target) inflation

Fiscal multiplier = $\frac{1}{1-MPC(1-t)}$

Real exchange rate (d/f) = $nominal exchange rate \times \left[\frac{CP{I}_{foreign}}{CP{I}_{domestic}}\right]$

Cross Rate = $\frac{MXN}{AUD}=\frac{MXN}{USD}\times \frac{USD}{AUD}$

Net Income = Revenues - Ordinary Expenses + Other Income – Other Expenses + Gains – Losses

Straight line Depreciation = $\frac{Cost-residual value}{Usful Life}$

Double Declining Depreciation = $\frac{2}{Usful Life}(Cost - accumulated Depreciation) [* salvage value not be to be considered here]$

Diluted EPS = $\frac{\left[PAT-pref.div\right]+convertible prefeved div+convertible in (1+t)}{wtd.average of no. of shares+shares from conversation of convertible preference share debt+Shares from conversion of convertible preference shares from of options|wairants}$

Comprehensive Income = Net Income (PAT) + Other Comprehensive Income [OCI]

Net profit margin = $\frac{NP}{sales}$

Financial leverage = $\frac{average Assets}{Average Equity}=A/E$

Investing & Financing = $\frac{CFO}{Cash outflows from CFI+CFF}$

ROE = $\frac{PAT}{PBT}\times \frac{PBT}{EBIT}\times \frac{EBIT}{SALES}\times \frac{SALES}{ASSETS}\times \frac{A}{E}$

Ending Inventory = Beginning Inventory + Purchases – COGS

SL Depreciation expense = $\frac{Original Cost-DSalvage value}{Depreciable life}$

DDB depreciation in year = $\left(\frac{2}{useful life}\right) \left(Cost-Accumulated Depreciation\right)$

Remaining Useful Life = $\frac{Ending Net PP\&E}{Annual Depreciation Expense}$

DTL = Tax expense < Tax payable

Interest Expense = (the market rate at issue) x (the balance sheet value of the liability at the beginning of the period)

Effective Tax Rate = $\frac{Income Tax Expenses}{Pretax Income}$

Interest expense = BV of bond at inception (issuance) x market rate at the time of issuance

Financial Leverage Ratio = $\frac{Average Total Assets}{Average Total Equity}$

Interest Coverage = $\frac{EBIT}{Interest Payments}$

Fixed Charge Coverage = $\frac{EBIT+Lease payments}{Interest Payments+lease payments}$

Investing and Financing = $\frac{CFO}{Cash outflows from Investing and Financing activities}$

Operating cycle = days of inventory + days of receivables

Enterprise Value = Market value of stocks + Market value of debt – Cash and short term investments

Free float Adjusted Market Capital wtd Index = $\left[\frac{\sum P_1{Q}_{1}ff}{\sum P_0{Q}_{0}ff}-1\right]$

ROE = $\frac{N{I}_t}{B{V}_{t-1}/2}$

CAPM = $R_F+\left(R_m-R_F\right)\beta$

Dividend Payout Ratio = $\frac{Dividends}{Net income available to common shareholder}$

Bond Equivalent Yield = $\left(\frac{Face Value-Price}{Face Value}\right)\times \frac{365}{days}=HPY\times \frac{365}{days}$

Conversion Value = Conversion Ratio ×Current Market Price of a Common Share

Dirty price = clean price + accrued interest

Option value = Z-spread – OAS

A semiannual-coupon bond with N years maturity Price = $\frac{Coupon}{1+{{\displaystyle \frac{YTM}{2}}}_{}}+\frac{Coupon}{{\left(1+{\displaystyle \frac{YTM}{2}}\right)}^2}... ... ... \frac{(Coupon+principal)}{{\left(1+{\displaystyle \frac{YTM}{2}}\right)}^{N\times 2}}$

No arbitrage price = $\frac{C{F}_1}{1+S_1}+\frac{C{F}_2}{\left(1+S_2\right)}... ... ... ...\frac{(CF +principal)}{{\left(1+Sn\right)}^n}$

Option Value = Zspread – OAS (Option Adjusted Spread)

Loan-to-value = $\frac{current mortgage amount}{current appraised value}$

Money duration = annual modification duration x full price of bond position

Change in full bond price = $(-E.D. x ∆Y) +\frac{ 1}{2} x Ec x {(∆Y)}^2$

Duration gap = Macaulay’s duration – investment horizon

Price Value of a Basis Point (PVBP) = $\frac{(P_2-P_1)}{2}$

Credit risk = default risk + loss severity (1-RR)

The forward price of an asset to be delivered at time T is = $F_0\left(T\right)=S_0{(1+Rf)}^T$

Payoff to FRA = $\frac{(market rate-contracted rate)x NPx {\displaystyle \frac{n}{12}}}{1+(market rate x {\displaystyle \frac{ n}{12}})}*\frac{n}{360} if no. of days$

Option premium = intrinsic value + time value

Put call forward parity = $$\begin{gathered} C_o+\frac{X}{{(1+RF)}^T}=P_o+\frac{F}{{(1+RF)}^T} \\ \to C_o-P_o=\frac{F-X}{{(1+RF)}^T} \end{gathered}$$