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Series 7 Fromulas

QuestionAnswer
Used to meet emergencies but not for expansion of plant facilities or other major expenditures Net Working Capital Formula = Current Assets-Current Liabilities
Increased by Tax loss Carried Forward Reduction of corporate income tax rates Retirement of Outstanding Bonds EPS= Net Earnings / Outstanding Common Shares
EPS is affected by? Changes in a company inventory valuations Acquisitions and dispositions of other companies and Subsidiary (Spin Off)
Fully diluted earnings Per Share Calculated assuming all potential dilutions occur from convertible bonds, stock, PFD Stock and Warrants
Current Ratio (Standard Minimum is 2:1) Describes Liquidity, not profitability, coverage or debt) Current Assets / Current Liabilities
Determine the outstanding shares Outstanding shares = Issued Shares – Treasury stock
Acid Test (Quick Ratio) Standard Min 1:1 Most Stringent Measure of Corporate liquidity Acid Test (Quick Ratio)= Current Assets- Inventory / Current Liabilities
Interest Coverage (Fixed Charge Coverage) Coverage should be or 7 times over expenses Interest Coverage= Operating Profit / Interest Expense
Debt to Equity Ratio (Used to determine if company is Conservative or Speculative) Debt to Equity Ratio= Total Debt/ Net Worth (Same as Share Holders Equity, Measure of Financial Leverage, used in analysis of the financial structure of a company)
Margin Profit Margin Profit = Operating Profit / Net Sales
Cash Flow Cash Flow= Net Income + Depreciation
Referred to as ''Multiple at Which Stock Is Selling" Ration does not Change when Stock Split Occurs P/E Ratio =Market Price / Earnings Per Share
Book Value / Liquidating Value/ Net Tangible Asset Per Share Book Value = Share Holders Equity- PFD Stock /Outstanding Common Shares
Capitalization or Total Capital Total Capital= Share Holders Equity + Bonds
Bond Ratio Stated Value of Bonds / Capitalization
Common Stock Ratio Value of Common +Paid In Surplus+Retained Earnings / Capitalization
PFD Stock Ratio Stated Value of PFD/ Capitalization
Return on Assets Net Income ( Net Profit After Tax) / Total Tangible Assets
Basic Balance Sheet Equation? Total Assets = Total Liabilities + Net Worth
Return on Equity Net Income / Share Holders Equity
Total Return Growth + Income
Long margin account formula Long market value (LMV) – debit record (DR) = equity (EQ
Short margin account formula Short market value (SMV) + equity (EQ) = credit record (CR)
Calculate the time value of an option Premium (P) = intrinsic value (I) + time value (T)
Balance sheet formula Assets = liabilities + stockholder’s equity
Calculate working capital Working capital = current assets – current liabilities
Cease Trading For Options 4:02 PM on the business day prior to expiration
Exercise Cut Off time for Options 5:30 PM EST on the business day prior to expiration
Expiration Day For options 11:59 PM EST on the Saturday following the third Friday of the month
Sub Chapter S Corporation 100 or less Shares holders , One class of stock, Aliens & other corporations are prohibited from participating
Registrar Make sure the amount of shares outstanding does not exceed the number of shares authorized by the firm’s corporate charter. Determines which shareholders are paid a cash or stock dividend
Current Yield Annual Dividend / Market Price
DPS Dividends Paid to Common Share Holders / Outstanding Shares
Mutual Fund Pricing NET ASSET VALUE + SALES LOAD = P O Price
Offering Price NAV/100%-Sales Load
Sales Load % (OP- NAV) /OP
Created by: Ekitheman1