PSU Financial Formula Vault

$$\text{ROE} = \left(\frac{\text{Net Income}}{\text{Revenue}}\right) \times \left(\frac{\text{Revenue}}{\text{Assets}}\right) \times \left(\frac{\text{Assets}}{\text{Equity}}\right)$$

$$\text{ICR} = \frac{\text{EBIT}}{\text{Interest Expense}}$$

$$\text{Quick Ratio} = \frac{\text{Current Assets} - \text{Inventories} - \text{Prepaid Expenses}}{\text{Current Liabilities}}$$

$$K_e = R_f + \beta \times (R_m - R_f)$$

$$\text{WACC} = \left(\frac{E}{V} \times K_e\right) + \left(\frac{D}{V} \times K_d \times (1 - T)\right)$$

$$P_0 = \frac{D_1}{K_e - g} \implies K_e = \frac{D_1}{P_0} + g$$

$$\text{EOQ} = \sqrt{\frac{2 \times A \times O}{C}}$$

$$\text{CCC} = \text{DIO} + \text{DSO} - \text{DPO}$$

$$\text{P/V Ratio} = \frac{\text{Contribution}}{\text{Sales}} = \frac{\text{Change in Profit}}{\text{Change in Sales}} \times 100$$

$$\text{BEP (Units)} = \frac{\text{Fixed Cost}}{\text{Contribution per Unit}}, \quad \text{BEP (Value)} = \frac{\text{Fixed Cost}}{\text{P/V Ratio}}$$

$$\text{Margin of Safety} = \text{Actual Sales} - \text{Break-Even Sales} = \frac{\text{Profit}}{\text{P/V Ratio}}$$

$$\text{DOL} = \frac{\text{Contribution}}{\text{EBIT}} = \frac{\% \Delta \text{EBIT}}{\% \Delta \text{Sales}}$$

$$\text{DFL} = \frac{\text{EBIT}}{\text{EBT}} = \frac{\% \Delta \text{EPS}}{\% \Delta \text{EBIT}}$$

$$\text{DCL} = \text{DOL} \times \text{DFL} = \frac{\text{Contribution}}{\text{EBT}}$$