Formulae

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Return on equity
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Return on equity
Dividend yield
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Dividend yield
Net asset turnover
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Net asset turnover
NAT = RED
Receivable turnover
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Receivable turnover
Inventory turnover
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Inventory turnover
Payables turnover
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Payables turnover
Return on Capital Employed
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Return on Capital Employed
Average annual accounting profit
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Average annual accounting profit
Initial ROCE
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Initial ROCE
Receivable days
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Receivable days
Inventory days
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Inventory days
Finished goods days
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Finished goods days
Raw materials days
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Raw materials days
Payable days
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Payable days
Cash operation cycle of working capital
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Cash operation cycle of working capital
Gearing
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Gearing
Interest cover
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Interest cover
Dividend cover
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Dividend cover
Net asset value
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Net asset value
Earnings yield
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Earnings yield
Discount factor for a perpetuity
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Discount factor for a perpetuity
Interest coverage ratio
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Interest coverage ratio
The Baumol Model
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The Baumol Model
Economic quantity of cash
Constant dividend
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Constant dividend
Dividend growth
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Dividend growth
Cost of Debt for preference shares
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Cost of Debt for preference shares
Cost of debt – Irredeemable bonds
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Cost of debt – irredeemable bonds
P0 = ex-interest MV of $100 nominal of debt. i = the pre-tax interest paid on $100 nominal of debt
Cost debt of redeemable debentures
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Cost debt of redeemable debentures
Linear interpolation method. Step I. Annual after-tax interest payment.Eg. 7 × 0.7 = 4.90
Ungearing and regearing formula
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Ungearing and regearing formula
1) Proxy company data. 2) Target company data.
Project-specific cost of equity
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Project-specific cost of equity
Average equity risk premium x Regeared Beta
Present value of annual tax savings
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Present value of annual tax savings
Company market value using earnings
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Company market value using earnings
2. preferable method
Company market value using discounted cash flow
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Company market value using discounted cash flow
Company market value - Earnings yield method.
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Company market value - Earnings yield method.
Market value of redeemable debentures
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Market value of redeemable debentures
Accounting rate of return
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Accounting rate of return
Cost of equity - using CAPM
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Cost of equity - using CAPM
Operating gearing ratio
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Operating gearing ratio
Overdraft
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Overdraft
Financial risk
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Financial risk
Operating risk
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Operating risk - like OGR but conversely.
Dividend growth - using return of investment
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Dividend growth - using return of investment
Return on investment
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Return on investment
Money market hedge – zloty received
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Money market hedge – zloty received
Money market hedge – zloty payment
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Money market hedge – zloty payment
Lead payment – zloty payment
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Lead payment – zloty payment
Forward market hedge – zloty received
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Forward market hedge – zloty received
Forward market hedge – zloty payment
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Forward market hedge – zloty payment
Working capital
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Working capital
CS - credit sales
Retention ratio
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Retention ratio
Dividend growth - using retention ratio
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Dividend growth - using retention ratio
Equivalent annual cost
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Equivalent annual cost
Deep discount bond – gross redemption yield
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Deep discount bond – gross redemption yieldDeep discount bond – gross redemption yield
IR - Investment rate (eg. 60%)
Conversion premium for convertible bonds
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Conversion premium for convertible bonds
Book value of average investment
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Book value of average investment
Book value for WACC
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Book value for WACC
DROS
Compounding
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Compounding
Sensitivity margin
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Sensitivity margin
Profit using perpetuity from year 5
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Profit using perpetuity from year 5
P - profit
DF - discount factor (e.g. 0.659)
Company market value – using PER
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Company market value – using PER
venture capital
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Musharaka
Wspólna spółka, wspólne proporcjonalne dzielenie zysków i strat, możliwość biernego uczestnictwa ale wówczas mniejsze zyski.
Islamic finance formula
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SIM-LonLeRi
loan notes; leasing, right issue

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