**Finance Formulas** / August 2, 2018 / Rory Wise

read moreBusiness valuation is a process and a set of procedures used to estimate the economic value of an owner's interest in a business. Valuation is used by financial market participants...

**Finance Formulas** / June 25, 2018 / Rory Wise

read moreCommon shareholders expect to obtain a certain return on their equity investment in a company. The equity holders' required rate of return is a cost from the company's perspective because...

**Finance Formulas** / June 23, 2018 / Heaven Estes

read moreThe higher the debt ratio, the more leveraged a company is, implying greater financial risk. At the same time, leverage is an important tool that companies use to grow, and...

**Finance Formulas** / August 5, 2018 / Briana Leonard

read moreConsider the following example to illustrate the concept. Assume hypothetical company BigBox has operating income or earnings before interest and taxes (EBIT) of $100 million in Year 1, with interest...

**Finance Formulas** / August 5, 2018 / Kenley Hopper

read moreFor example, if a company had $150,000 in revenues and $50,000 in explicit costs, its accounting profit would be $100,000. The same company also had $25,000 in implicit, or opportunity...

**Finance Formulas** / August 4, 2018 / Alia Marquez

read moreCompound interest is calculated by multiplying the principal amount by one plus the annual interest rate raised to the number of compound periods minus one.The total initial amount of the...

*Finance Formulas* / August 4, 2018 / Aniyah Booth

read moreA down payment is a type of payment made in cash during the onset of the purchase of an expensive good or service. The payment typically represents only a percentage...

__Finance Formulas__ / August 5, 2018 / Alia Marquez

read moreA dividend is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense;...

*Finance Formulas* / August 5, 2018 / Avalynn Orr

read moreDiscounted cash flow (DCF) is a valuation method used to estimate the attractiveness of an investment opportunity. DCF analyses use future free cash flow projections and discounts them, using a...

__Finance Formulas__ / August 4, 2018 / Alia Marquez

read moreInstead of calculating interest on a finite number of periods, such as yearly or monthly, continuous compounding calculates interest assuming constant compounding over an infinite number of periods. Even with...

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