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Giovanni
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What does PE Ratio Measure?
 Price per share /
 Earnings per share
Market Value

Operational cash flow
EBIT $219
Depreciation $90
Current Taxes $71
OCF $238

Capital Spending in OCF
 Purchase
 of fixed assets $198
 Sales
 of fixed assets $25

ICF
Interest $49
Debt service 122
Proceeds from new debt sales 86
Total $36

FCF
FCF=OCF+ICF
Dividends $43
Cash to Stockholders 49
 Proceeds
 from new stock issue 43
Total $6


what does PE Ratio measure?
Market value


oTotal Debt Ratio
= (TA – TE) /TA
Leverage

oTotal Asset Turnover
= Sales / Total Assets

Future Value
FV = C0×(1 + r)

Present Value
PV=C _{1} / 1 + r
 Where C1 is
 cash flow at date 1, and
r is the appropriate interest rate.

Future Value over Multi periods
FV = C0×(1 + r)T
Where
C0 is cash flow at date 0,
r is the appropriate interest rate, and
 T is the number of periods over which the cash
 is invested.

oHow much would an investor have
to set aside today in order to have $20,000 five years from now if the current
rate is 15%?
9,943.53= 20000 / (1.15)^{5}

If we deposit $5,000 today in an account paying 10%, how long does it take to grow
to $10,000?
10,000= 5,000/ 1+1.10^{t
10,000/5,000= 2 = }

compounding periods
FV=C_{0 }x ( 1 + r/m) ^{mT
FV = C0×erT }

Growing Perpetuity
PV= C/ rg
PV= C x (1 + g)/ (rg)^{2} + PV= C x (1 + g)^{2}/ (rg)^{3} .....

Annuity
PV = C/r [ 1 1/ (1+r)^{t }]

IRR
NPV= C + ....

Bond Value
 f= face value




