Formula Finder Essay

Submitted By tommy1211
Words: 1151
Pages: 5

7/7/2014

Formula Finder

Formula Finder
The Formula Finder is a list of formulas in the CSC text listed by chapter.
Chapter

4

GDP Expenditure
Approach
Key Words:
Gross Domestic
Product

4

Inflation Rate

GDP = C + I + G + (X – M)
C= personal consumption
I= investments
G= government spending on goods and services
X= exports
M= imports
CPI Current Period – CPI Previous Period x 100
CPI Previous Period

Key Words:
Inflation
7

Present Value (PV)
Key Words:

Future value of principal
(1 + discount rate)number of compounding periods

Income stream; coupon payment; worth 7

Present Value of an C= coupon payment
Annuity (APV) r= discount rate
Key Words:

n= number of coupon payments

Income stream; coupon payment; worth 7

Current Yield
Key Words:
Current yield; cash flows; market price

7

Annual Cash Flow x 100
Current Market Price

Treasury Bill Yield
Key Words:
Short-term
securities;

100 - price

365 x price

x 100 term https://elearning.csi.ca/webct/ContentPageServerServlet/Formula%20Finder/FormulaFinder_2013.html?pageID=236632062021

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Formula Finder

treasury bills
7

Approximate
Yield to Maturity
Key Words:
Maximum price; par value; bond yield; price gains

7

Interest Income +/- Price Change per Compounding Period x 100
(Purchase Price + Par Value)/2

Nominal Bond Rate of Return
Key Words:

Real return rate + inflation rate

Inflation rate; nominal rate; real rate
7

Accrued Interest
Par amount x Coupon Rate x Time Period
Key Words:
Accrued interest; coupon rate

10

Intrinsic Value of a
Call Option
Key Words:
Intrinsic value;
Value of an Option

10

10

Intrinsic Value of a
Put Option

Where the time period = holding period / 365

Price of the Underlying – Strike Price
Note: options cannot have intrinsic value less than zero. A negative result from the formula above indicates the intrinsic value is simply zero.

Strike Price - Price of the Underlying

Key Words:

Note: options cannot have intrinsic value less than zero.

Intrinsic value;
Value of an option

A negative result from the formula above indicates the intrinsic value is simply zero.

Option premium
Key Words:

Intrinsic value + Time Value

Option price;
Value of an option
10

Intrinsic Value of
Rights
(During the Cum
Rights Period)
Key Words:
Ex rights period; rights issue; intrinsic value of rights Market price of stock - subscription price
Number of rights to buy 1 share + 1

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10

Intrinsic Value of
Rights
(During the Ex
Rights Period)
Key Words:
Cum rights period; rights issue; intrinsic value of rights 12

Market price of stock - subscription price
Number of rights to buy 1 share

Straight Line
Depreciation
Purchase price - salvage value

Key Words:
Asset utilizing; depreciation; salvage; depletion 12

Declining-Balance
Depreciation
Key Words:
Asset utilizing; depreciation; salvage; depletion 13

Years of useful life

Stock Intrinsic value (Dividend Discount
Model)
Key Words:

Straight line percentage depreciation rate x 2 on each year's remaining balance

Expected dividend paid out in 1 year
(Market capitalization rate - growth rate)

Dividend growth rate
14

Return on Common
Equity (ROE)
Key Words:
ROE;
return on investment 14

Working Capital
Ratio
Key Words:

Profit x 100
Total Equity

Current assets
Current liabilities

Current ratio
14

The Quick Ratio
Key Words:
The acid test; corporate ratio;

Current assets - inventories
Current liabilities

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liquidity ratio
14

Asset Coverage
Key Words:
Asset value

14

Total assets - goodwill - intangible assets [current liabilities less short-term debt]
Total debt outstanding/$1,000

Debt/Equity Ratio
Total Debt Outstanding
Key Words:
Debt burden; capital structure

14

Equity

Cash Flow from