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    CF2 Formula Sheet MGB Sep 18

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    Jhanvi Sharma
    This document provides a formula sheet for corporate finance concepts including risk and return, weighted average cost of capital (WACC), capital structure theory, and working capital management. Some key formulas included are the expected return of a stock, portfolio, and CAPM; WACC using both the traditional and classical tax method; economic order quantity; inventory, receivables, and payables turnover ratios; and components of the operating and cash cycle.

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    CF2 Formula Sheet MGB Sep 18

    Uploaded by

    Jhanvi Sharma
    15 views1 page
    This document provides a formula sheet for corporate finance concepts including risk and return, weighted average cost of capital (WACC), capital structure theory, and working capital management. Some key formulas included are the expected return of a stock, portfolio, and CAPM; WACC using both the traditional and classical tax method; economic order quantity; inventory, receivables, and payables turnover ratios; and components of the operating and cash cycle.

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    This document provides a formula sheet for corporate finance concepts including risk and return, weighted average cost of capital (WACC), capital structure theory, and working capital management. Some key formulas included are the expected return of a stock, portfolio, and CAPM; WACC using both the traditional and classical tax method; economic order quantity; inventory, receivables, and payables turnover ratios; and components of the operating and cash cycle.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    15 views1 page

    CF2 Formula Sheet MGB Sep 18

    Uploaded by

    Jhanvi Sharma
    This document provides a formula sheet for corporate finance concepts including risk and return, weighted average cost of capital (WACC), capital structure theory, and working capital management. Some key formulas included are the expected return of a stock, portfolio, and CAPM; WACC using both the traditional and classical tax method; economic order quantity; inventory, receivables, and payables turnover ratios; and components of the operating and cash cycle.

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    © All Rights Reserved
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    Corporate Finance 2 - Formula Sheet

    Student Name: ID. No:

    Risk & Return Working Capital Management 1


    1. E(R) of a Stock = Pa x Ra + Pb x Rb + …. 1. NWC = (Cash + Other current assets) – Current
    Liabilities
    2. E(R) of Portfolio = Wa x Ra + Wb x Rb + ….
    2. NWC = L/T Debt + Equity - Fixed assets
    3. Beta of Portfolio = Wa x βa + Wb x βb + ….
    3. Cash = L/T Debt + Equity + Current Liabilities –
    4. CAPM E(R) = Rf + β(Rm – Rf) Current Assets other than cash – Fixed assets
    5. RRR =[E(R) – Rf]/β 4. Inventory turnover = COGS/Average Inventory
    WACC 5. Accounts receivable turnover = Credit
    sales/Average accounts receivable
    1. WACC (Imput Tax) = Wd x Kd (1-T) + We x Ke (1-T)

    2. WACC (Classical tax) = Wd x Kd (1-T) + We x Ke 6. Payables turnover = COGS/Average account


    payable
    3. Wd = Value of Debt / Total value of capital
    7. Inventory period = 365/Inventory turnover
    Structure = D/(D=E)
    8. Accounts receivable period =
    4. We = Value of Equity/ Total Value of Equity =
    365/Receivables turnover
    E/(D+E)
    9. Accounts payable period = 365/Payables
    5. Corp Bond Kd = Rf + RP = YTMG + CS = YTMC
    turnover
    6. Common Shares Ke = [D1/P0] + g or CAPM
    10. Operating cycle = inventory period + accounts
    7. Preference shares Kp = D/P0 receivable period

    Capital Structure Theory 11. Cash cycle = operating cycle – accounts


    payable period
    1. EPS Breakeven for EBIT
    Working Capital Management 2
    [EBIT/No of shares Outstanding] without debt =
    [(EBIT – Interest)/ No of shares Outstanding] with 1. Float = Bank Balance – Account Balance
    debt
    2. Net Float = Disbursement Float – Collection
    2. EPS = Net Income/No. of shares outstanding Float

    3. ROE = Net Income/Equity 3. EAR = (1 + APR/m) m - 1

    4. VL = D + E = VU 4. Economic Order Quantity

    5. WACC = RA = (E/V) x RE + (D/V) x RD 2TF


    Q* 
    6. RE = RA + (RA – RD) x (D/E) CC
    7. Interest Tax Shield = i x T 5. Total carrying cost = (Average inventory) x
    (Carrying cost per unit) = (Q/2) *(CC)
    8. Market Cap = P0 x No. of shares outstanding
    6. Total restocking cost = (Fixed cost per order)
    9. Value = Market Cap + Debt – Cash = PV of FCF x (Number of orders) = F(T/Q)
    Dividend Policy 7. Total Cost = Total carrying cost + Total
    restocking cost = (Q/2) *(CC) + F(T/Q)
    1. Px = P0 - D

    2. DPS = Dividend/No of Shares Outstanding

    3. (P0 – Px)/D = (1-Tp)

    4. P/E = Price Per Share / Dividend Per Share

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