Ifc (Investment Funds In Canada) Formulas

Front 1

Reward-to-risk

Back 1

=fund return/fund standard deviation

Front 2

Sharpe ratio

Back 2

(fund return -tbill rate)/fund standard deviation

Front 3

Gross profit margin ratio

Back 3

(net sales- cost of goods sold)/net sales

Front 4

Price to earnings ratio

Back 4

current price of common share/earnings per share

Front 5

Calculating return

Back 5

R=(Pi+Ci-Po)/Po

R=return

Po=Original price

Pi=sold price

Ci= cash flow earned

Front 6

Time weighted return aka geometric mean return

Back 6

TWR=[(1+ri)(1+rii)]^1/2-1 for two years

or

TWR=[(1+ri)(1+rii)(1+riii)]^1/3-1 for 3 years

Front 7

Present value

Back 7

=future value / (1+i)^n

i=interest

n=number of years

Front 8

value of common share

Back 8

Pc=$dividend/ic-g

Pc= value of common share

$dividend=dividend expected to be paid at the end of the year

ic= return required for risk

g= growth rate of dividend

Front 9

valuing a bond or YTM

Back 9

Bo=C1/(1+i)^1+C2/(1+i)^2+C3/(1+i)^3+C4+par/(1+i)^4

Bo=current value of bond

C1-C4= annual coupon payments (in dollars)

Par= par or face value paid at maturity

Front 10

AYM approx yield to maturity

Back 10

AYM=(C+(par-Bo)/n)/((par+Bo)/2)

AYM= approx yield to maturity

C=annual coupon payment in dollars

Par=bonds par

Bo=bond current market price

n=number of years remaining to maturity

Front 11

Selection effect

Back 11

actual return- allocation return

Front 12

Net return on common equity

Back 12

net income / share holders' equity

Front 13

Operating profit margin ratio

Back 13

(net sales- cogs+selling,admin, gen. expenses)/net sales

Front 14

inventory turnover ratio

Back 14

Cogs/inventory

Front 15

current yield

Back 15

sevenday yield x (365/7)

Front 16

effective yield

Back 16

[(1+sevenday yield) 365/7-1]

Front 17

Debt/equity ratio

Back 17

short & long term debt/book value of shareholders' equity

Front 18

What is the return policy or allocation return

Back 18

portfolio return= Index return x portfolio weighting

Front 19

Interest coverage ratio

Back 19

earnings before interest & taxes/total interest charges

Front 20

current yield

Back 20

coupon payment / current market price

Front 21

quick ratio aka acid test

Back 21

(current assets- inventories)/current liabilities

Front 22

current ratio

Back 22

current assets/current liabilities

Front 23

Calculate inflation

Back 23

[(CPI current-CPI previous)/CPI previous]x100

Front 24

earnings per common share EPS ratio

Back 24

(Net earnings - preferred shares)/number of common shares outstanding

Front 25

measuring portfolio risk

Back 25

Rp=Rf+Bp(Rm-Rf)

Rp=expected return on portfolio

Rf=expected return from holding t-bills

Bp=beta of portfolio

Rm=expected return on the S&P/TSX Composite index

Front 26

NAVPU

Back 26

(market value of all assets- total liabilities)/number of units withstanding

Front 27

Inflation Rate

Back 27

[(CPIcurrent-CPI previous)/CPI previous] x 100

Front 28

sevenday yield

Back 28

(ending net assets value/initial net asset value)-1

Front 29

cashflow from operations/total debt ratio

Back 29

cash flow from operations/total debt

Front 30

pretax profit margin ratio

Back 30

net earnings before taxes/net sales

Front 31

valuing a preferred share

Back 31

V=($divn/(1+r)^n+same for each year

V=value

$div=dvidend of the next period

r=required rate of return

n=number of year

Front 32

preferred perpetual shares' current market value

Back 32

Pp=$div/ip

Pp=current market value

$div= dividend in dollars

ip= annual yield curently offered on preferred shares of similar risk level

Front 33

GDP

Back 33

GDP=C+I+G+X-M

C=consumption of households on G&S

I=investment by business on capital goods

G= government spending(military, health etc)

X=exports puchased by foreigners

M= imports sold to us by foreigners

Front 34

GDP

Expenditure Approach

Back 34

GDP = C + I + G + (X-M)

C= Personal Consumption

I = Investment

G= Government Spending on goods and services

X= Net Exports

M= Imports

Front 35

GDP

Income Approach

Back 35

Totalling=

Wages of labour +

Rent of Land +

Interest for capital goods +

Profits for entrepreneurs

Front 36

Calculating Income Tax Payable

Back 36

Front 37

Tax Interest Income, Div and Capital Gain

Back 37

Front 38

Contributions To an RRSP

Back 38

-18% of the previous year's earned income

-The RRSP dollar limit fo the year

($23,820 in 2013)

lesser of the above two amounts = (A)

Contribution = (A) - PA - PSPA + Contribution Room

PA= Pension Adjustment

PSPA = Past Service Pension Adjustment

Front 39

Bond Yield

Back 39

Current Yield

Front 40

YTM (Yield to Maturity)

Back 40

Front 41

Perpetual Preferred Share

Back 41

Front 42

Expected Return

Back 42

Expected Return = Cash Flow + Capital Gain (or -Capital Loss)

Front 43

Real Return

Back 43

Real Return = Nominal Rate- Annual Inflation Rate

*same of computing Real GDP

Front 44

Rate of Return

Back 44

Front 45

Arithmetic Mean (AMR)

Back 45

Front 46

Geometric Mean (GMR)

Back 46

Front 47

Rate of Return on a Portfolio

Back 47

Front 48

Interest rates on bonds with different duration

Back 48

Front 49

Financial Statement Equation

Back 49

Assets = Liabilities +Equity

Front 50

Dividend Yield

Back 50

Dividend Yield = Annual Dividend per share/ Current market price

Front 51

P/E or Price Earning Ration

Back 51

Current Price of Common/ Earnings per share

*Also Indicates Investor Confidence

Front 52

Trend Analysis

Back 52

Front 53

Seven-day Yield

Back 53

(Ending Net Asset Value/Initial Net Asset Value)-1

Front 54

Effective Yield (money market funds)

Back 54

Front 55

Sharpe Ratio

Back 55

Front 56

Offering or Purchase Price

Back 56