Formulas Flashcards by Joe Nash

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Economic Value Added

formula

Capital
* wacc
= normal return
- net income after tax
= EVA

This number is absolute value

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Average collection period

formula

365/AR turnover ratio

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Residual income

Formula

Net income above the minimum desired rate of return on invested capital

Min. Desired rate of return =
desired rate of return x invested capital

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Formulas Flashcards

(3 cards)