Stock market equations
5 minutes
financemathseconomicsstatisticsprobabilityeconometrics
quantitativefinance
Advanced
anybody
Fundamental Analysis
Returns / Growth / Change
Percentage=(Final−Initial)/Initial×100\scriptsize Percentage = (Final - Initial) / Initial \times 100
Average yearly compounded growth rate
CAGR=(ValuefinalValueinitial)1n−1\scriptsize \text{CAGR} = \left( \frac{Value_{final}}{Value_{initial}} \right)^{\frac{1}{n}} - 1
Valuation and Health
Book Value Per Share=EquityOutstanding SharesPrice-to-Book (P/B)=Share PriceBook Value per SharePrice-to-Earnings (P/E)=Share PriceEarnings per ShareMarket Capitalization=Share Price×Outstanding SharesDebt-to-Equity=Total DebtEquityPrice-to-Sales (P/S)=Share PriceRevenue per ShareCurrent Ratio=Current AssetsCurrent LiabilitiesQuick Ratio=Cash + Cash Equivalents + Marketable Securities + ReceivableCurrent LiabilitiesInventory Turnover=Cost of Goods SoldInventoryDiscounted Cash Flow (DCF)=∑t=1nCFt(1+r)tEnterprise Value (EV)=Market Cap+Debt+Preferred Equity+Minority Interest−CashEnterprise Value Multiple (EV/EBITDA)=Enterprise ValueEBITDAEnterprise Value Multiple (EV/Revenue)=Enterprise ValueRevenueEnterprise Value Multiple (EV/FCF)=Enterprise ValueFree Cash FlowEnterprise Value Multiple (EV/EBIT)=Enterprise ValueEBITEnterprise Value Multiple (EV/Net Sales)=Enterprise ValueRevenueEnterprise Value Multiple (EV/Sales)=Enterprise ValueRevenueGordon Growth Model (Constant Growth)=Next DividendRequired return−Growth rate\scriptsize \begin{align} \text{Book Value Per Share} &= \frac{\text{Equity}} {\text{Outstanding Shares}} \nonumber \\ \text{Price-to-Book (P/B)} &= \frac{\text{Share Price}}{\text{Book Value per Share}} \nonumber \\ \text{Price-to-Earnings (P/E)} &= \frac{\text{Share Price}}{\text{Earnings per Share}} \nonumber \\ \text{Market Capitalization} &= \text{Share Price} \times \text{Outstanding Shares} \nonumber \\ \text{Debt-to-Equity} &= \frac{\text{Total Debt}}{\text{Equity}} \nonumber \\ \text{Price-to-Sales (P/S)} &= \frac{\text{Share Price}}{\text{Revenue per Share}} \nonumber \\ \text{Current Ratio} &= \frac{\text{Current Assets}} {\text{Current Liabilities}} \nonumber \\ \text{Quick Ratio} &= \frac{\text{Cash + Cash Equivalents + Marketable Securities + Receivable}}{\text{Current Liabilities}} \nonumber \\ \text{Inventory Turnover} &= \frac{\text{Cost of Goods Sold}}{\text{Inventory}} \nonumber \\ \text{Discounted Cash Flow (DCF)} &= \sum_{t=1}^n \frac{CF_t}{(1+r)^t} \nonumber \\ \text{Enterprise Value (EV)} &= \text{Market Cap} + \text{Debt} + \text{Preferred Equity} + \text{Minority Interest} - \text{Cash} \nonumber \\ \text{Enterprise Value Multiple (EV/EBITDA)} &= \frac{\text{Enterprise Value}}{\text{EBITDA}} \nonumber \\ \text{Enterprise Value Multiple (EV/Revenue)} &= \frac{\text{Enterprise Value}}{\text{Revenue}} \nonumber \\ \text{Enterprise Value Multiple (EV/FCF)} &= \frac{\text{Enterprise Value}}{\text{Free Cash Flow}} \nonumber \\ \text{Enterprise Value Multiple (EV/EBIT)} &= \frac{\text{Enterprise Value}}{\text{EBIT}} \nonumber \\ \text{Enterprise Value Multiple (EV/Net Sales)} &= \frac{\text{Enterprise Value}}{\text{Revenue}} \nonumber \\ \text{Enterprise Value Multiple (EV/Sales)} &= \frac{\text{Enterprise Value}}{\text{Revenue}} \nonumber \\ \text{Gordon Growth Model (Constant Growth)} &= \frac{\text{Next Dividend}}{\text{Required return}-\text{Growth rate}} \nonumber \\ \end{align}
Income and Profit
EBITDA is Earnings Before Interest, Taxes, Depreciation and AmortizationRevenue=Price×QuantityProfit=Revenue−CostsDividend Yield=Annual DividendShare Price×100ROE=Net IncomeShareholder EquityROA=Net IncomeTotal AssetsEPS=Net ProfitOutstanding Shares\scriptsize \text{EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization} \nonumber \\ \begin{align} Revenue &= \text{Price} \times \text{Quantity} \nonumber \\ Profit &= \text{Revenue} - \text{Costs} \nonumber \\ \text{Dividend Yield} &= \frac{\text{Annual Dividend}}{\text{Share Price}} \times 100 \nonumber \\[0.5em] ROE &= \frac{\text{Net Income}}{\text{Shareholder Equity}} \nonumber \\[0.5em] ROA &= \frac{\text{Net Income}}{\text{Total Assets}} \nonumber \\[0.5em] EPS &= \frac{\text{Net Profit}}{\text{Outstanding Shares}} \nonumber \end{align}