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Series 7 Fromulas
| Question | Answer |
|---|---|
| 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 |