**Finance Formulas** / June 21, 2018 / Tatiana Douglas

read moreThe cost of equity can be a bit tricky to calculate as share capital carries no "explicit" cost. Unlike debt, which the company must pay in the form of predetermined...

**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 moreThe cash flow statement provides data for ratios dealing with cash. For example, the payout ratio is the percentage of net income paid out to investors. Both dividends and share...

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

read moreThe current ratio is mainly used to give an idea of a company's ability to pay back its liabilities (debt and accounts payable) with its assets (cash, marketable securities, inventory,...

*Finance Formulas* / August 5, 2018 / Aniyah Booth

read moreYou can use the bond price formula to determine the value of a bond. While it involves some number crunching, itâ€™s a fairly straightforward process because future cash flows to...

__Finance Formulas__ / August 4, 2018 / Alia Marquez

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 5, 2018 / Alia Marquez

read moreThe higher the DFL, the more volatile earnings per share (EPS) will be. Since interest is a fixed expense, leverage magnifies returns and EPS, which is good when operating income...

__Finance Formulas__ / August 5, 2018 / Alia Marquez

read moreThis ratio measures the financial leverage of a company. Companies with higher levels of liabilities compared with assets are considered highly leveraged and more risky for lenders....

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