Flashcards in Rando Formulas Deck (24):

1

## growth formula

### retention ratio x ROE

2

## Economic Value Added

###
EBIT(1 − t) − $WACC

NOPAT - $WACC

3

## Multi-Stage Residual Income Model

### V0 = B0 + PV of interim high-growth RI + PV of continuing RI

4

## Price to Sales Multiple

### P0 / S0 = [(E0 / S0)(1 - b)(1 + g)] / (r - g)

5

## growth via SBV

### g = Retention Rate × Profit Margin × SBV of equity

6

## price of a t-period zero-coupon bond

### P,t = 1 / (1+S,t)^T

7

## forward price (at t = j) of a zero-coupon bond maturing at (j + k)

### F,(j,k)= 1 / [1+f(j,k)]^k

8

## forward pricing model

### P,(j+k) = P,j * F,(j,k)

9

## Confidence Interval for slope coeff

### Slope coeff + or - (critical t stat * standard error of slope)

10

## Degrees of freedom

### n - k - 1

11

## Standard Error of Forecast

### SEE^2 [1 + 1/n + (X

12

## SST (components)

###
RSS + SSE

aka

Total variation (SST) = explained (RSS) + unexplained (SSE)

13

## SST

### (Yi - avg Y)^2

14

## Mean Squared Regression

### RSS/k

15

## Mean squared error

### SSE / (n - k - 1)

16

## K

### # of independent variables

17

## SEE

### square root of (SSE/(n-k-1)) or Square root of MSE.

18

## R^2

### RSS/SST = explained variation / total variation

19

## Net Fixed Capital Investment Adjustments

### Additions - proceeds

20

## FCFE via FCFF

### FCFF - Int(1-t) + net borrowing

21

## FCFF Formula

### NI + NCC + int(1-t) - WC inv - FC inv

22

## FCFE Formula

### NI + NCC - WC inv - FC Inv + Net borrowing

23

## FCFF long form mnemonic

###
N - net income

+I - int (1-t)

-C (WC)

-E (capex)

-----\/ NCC ----

+T DTL

+I Impairment

-P (Premium)Discount

-G (gain)

+L loss

+A amort

+D depreciation

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