Formulas Flashcards
(21 cards)
Gross Profit
Sales - COGS
EBITDA
Gross Profit - Operating Expenses
EBIT (Operating Profit)
EBITDA - Depreciation - Amortization
Profit before taxes
EBIT - Interest Expense
Net Income
Profit before taxes - Taxes
Gross Margin
(Revenue - COGS)/Revenue
EBIT Margin
EBIT/Revenue
(Net) Profit Margin
Net Income/Revenue
Contribution Margin
Price/unit - Variable Cost/unit
Breakeven Volume
Fixed Costs/(Price/unit - Variable Cost/unit)
ROI
Net Income/Cost of Investment
Payback Period
Cost of Investment/Profit per year
Net Present Value (NPV)
Cash Flow/(1+discount rate)^Year
PV of Perpetuity
Payment/Discount Rate
PV of Growing Perpetuity
Payment/(discount rate - growth rate)
Market Share (Revenue)
Company Revenue/Total Market Revenue
Market Share (Units)
Company Units/Total Market Units
5 Levers of Profitability
- Increase Prices
- Increase Volume
- Decrease Costs
- Change Product Mix
- Sell Alternative Products
Return on Equity (ROE)
Net Income/(Equity1 + Equity2)/2
Return on Assets (ROA)
Net Income/(AssetsP1 + AssetsP2)/2
Rule of 72
Dividing 72 by the growth rate will tell you how many periods it will take for your present value to double.
Example:
Present Value = 100
Growth Rate = 12%
Rule of 72 = 72/12 = 6
It will take 6 periods for 100 to grow to 200
