CHAPTER 3: Financial Statement

Income Statement
Earnings per Share = Dividends per Share = Net Income . Number of common shares outstanding Dividends Paid . Number of common shares outstanding

Balance Sheet
Net Working Capital = Current Assets Current Liabilities Assets = Liabilities + Owners Equity

CHAPTER 5: Time Value of Money

Simple Interest Simple Interest = Principal Amount x i Annual Compounding Interest

[
Where: FV future value PV present value Intraperiod Compounding Interest i interest rate n - periods

*m intraperiod compounding / number of compounding within a year (ex. semiannually, quarterly) Discounting

[
Solving for (n)

Solving of (i)

Rule 72: An approximate of how many years will it take for a given sum to double

COMPARING INTEREST RATES Annual Percentage Rate: interest earned or paid in a year without compounding ( ) ( ( ) )

*Interest rate per period examples: per month, per week Effective Annual Rate: when rates being compared are not compounded for the same number of periods of years ( )