FIN 200
Formula Sheet
Chapter 2: Financial Statements, Taxes, and Cash Flow
OCF = EBIT + Depreciation – Taxes
Chapter 3: Working with Financial Statements
Chapter 4: The Time Value of Money
𝐹𝑉𝑡 = 𝑃𝑉 × (1 + 𝑅)𝑡
𝑃𝑉 =
𝐹𝑉𝑡
(1 + 𝑅)𝑡
Chapter 5: Discounted Cash Flow Valuation
𝐹𝑉𝑡 = 𝐶 ×
𝑃𝑉 = 𝐶 ×
[(1 + 𝑅)𝑡 −1]
𝑅
1
[1 −
]
(1 + 𝑅)𝑡
𝑅
𝑃𝑉 =
𝐶
𝑅
𝐸𝐴𝑅 = [1 +
𝐴𝑃𝑅 𝑚
𝑚
] −1
Chapter 6: Interest Rates and Bond Valuation
𝑃0 = 𝑉0 = 𝐶 ×
[1 −
1
]
(1 + 𝑅)𝑡
𝑅
𝐹𝑉𝑡
+
(1 + 𝑅)𝑡
(1 + 𝑅) = (1 + 𝑟) × (1 + ℎ)
Chapter 7: Equity Markets and Stock Valuation
P0 =
D1
(1 + R )
1
+
D2
(1 + R )
2
+
D3
(1 + R )
3
+ ...
P0 =
D1
R−g
Chapter 8: Net Present Value and Other Investment Criteria
𝑛
𝑁𝑃𝑉 = (∑
𝑡=1
𝑛
(∑
𝑡=1
𝐶𝐹𝑡
𝐶𝐹1
𝐶𝐹2
𝐶𝐹𝑛
)
(
) − 𝐶𝐹0
−
𝐶𝐹
=
+
+
⋯
+
0
(1 + 𝑅)1 (1 + 𝑅)2
(1 + 𝑅)𝑛
(1 + 𝑅)𝑡
𝐶𝐹𝑡
𝐶𝐹1
𝐶𝐹2
𝐶𝐹𝑛
)=(
) = 𝐶𝐹0
+
+ ⋯+
𝑡
1
2
(1 + 𝐼𝑅𝑅)
(1 + 𝐼𝑅𝑅)
(1 + 𝐼𝑅𝑅)𝑛
(1 + 𝐼𝑅𝑅)
Chapter 9: Making Capital Investment Decisions
OCF = ( Sales − Costs )  (1 − Tc ) + Depreciation  Tc
Chapter 10: Some Lessons from Capital Market History
𝑅=
𝐷𝑡+1
𝑃𝑡
+
(𝑃𝑡+1 −𝑃𝑡 )
𝑃𝑡
=
𝐷1
𝑃0
+
(𝑃1 −𝑃0 )
𝑃0
1
𝑉𝑎𝑟(𝑅) = (𝑇−1) [(𝑅1 − 𝑅̅ )2 + ⋯ + (𝑅𝑇 − 𝑅̅ )2 ]
SD(R)= √𝑉𝑎𝑟(𝑅)
Chapter 11: Risk and Return
𝑛
𝐸(𝑅) = ∑(𝑅𝑗 × 𝑃𝑟𝑗 ) = 𝑅1 × 𝑃𝑟1 + 𝑅2 × 𝑃𝑟2 + ⋯ + 𝑅𝑛 × 𝑃𝑟𝑛
𝑗=1
𝐸(𝑅) = 𝑅𝑓 + 𝛽 × [𝐸(𝑅𝑚 ) − 𝑅𝑓 ]
𝑛
𝛽𝑝 = ∑(𝑤𝑗 × 𝛽𝑗 ) = 𝑤1 × 𝛽1 + 𝑤2 × 𝛽2 + ⋯ + 𝑤𝑛 × 𝛽𝑛
𝑗=1