Series 66 formulas
Alpha ( with risk-free rate )
( total portfolio return - risk free rate) - (portfolio beta x [ market return - risks free rate] )
Quick Asset Ratio
(Current Assets - Inventory) / Current Liabilities
book value per share
(Tangible assets-liabilities-par value of preferred)/shares of common stock outstanding
standard deviation is measures volatility
???
Alpha ( risk-free rate not giving)
Actual rate - ( Beta x market return)
Sharpe Ratio
Actual return - risk free rate / standard deviation
Current yield
Annual Interest / Current Market Price
yeild to maturity
Annual interest - ( premium paid / years to maturity ). All divided by average price of bond
Shareholders' Equity
Assets - Liabilities
Balance Sheet
Assets = Liabilities + Stockholders' Equity Asserts - liabilities = stockholders equity
Acid Test Ratio
Current Assets - Stock / Current Liabilities
Earnings Per Share (EPS)
Current market price divided by price to earnings ratio
Price/Earnings (P/E) Ratio
Current stock price divided by annual earnings per share (EPS).
Dividend payout ratio formula
Dividends per share / Earnings per share Or Common dividends / net income Or Percentage of earnings paid out as dividends
Future Value
Future value = present value X ( 1 + rate of return ) number of years of returns
range
In a group of numbers the difference between he highest and the Lowest number
Mode
In a group of numbers the one appearing most frequently
Participation Rate
In a guarenteed annuity like an equity index annuity, the insurance co will keep a % of the index gain as a fee for the guarentee
Median
In group of numbers...., the one with equal number quotes above and below
Total Return
Income ( dividends or interest) + gain or loss / original investment
real rate of return
Investment return minus inflation rate
Internal Rate of Return (IRR)
Is the discounted that makes the future value of an investment equal to its present value
geometric mean
Multiple all the numbers together and take the root of them
Tax Equivalent Yield
Municipal Rate / (100% - Tax Bracket)
Present value
PV= future value / (1 + rate of return) X number of years or returns
Average Market Price
Share Price Total / Number of Investments
Arithmetic Mean
Simple average of the numbers
Price to Book Ratio
Stock price divided by stock book price
Internal Rate of Return (IRR)
The discount rate that forces a project's NPV to equal zero.
earnings per share
The earnings available to common stockholders divided by the number of common stock shares outstanding.
Debt to Equity Ratio
Total Debt/Total Equity
dollar cost average
Total dollars invested / Number of shares purchased
Debt to Equity Ratio
Total liabilities divided by stockholders equity ($$)
After-Tax Return
Total return minus the marginal tax bracket
Working Capital
current assets - current liabilities
Current Ratio
current assets divided by current liabilities Higher the ratio the more liquid
Rule of 72
divide 72 by the interest rate = to find the # of years it will take for your money to double. Or Divide 72 by known numbers of years = interest rate required to double investments
Total Capitalization
long term debt + net worth
Future Value
the amount of money in the future that an amount of money today will yield, given prevailing interest rates
Net Present Value (NPV)
the difference between an investment's market value and its cost
Present Value (PV)
the value today of a future cash flow or series of cash flows
discounted cash flow (DCF) valuation
valuation calculating the present value of a future cash flow to determine its value today
