List of Abbreviations
Abbreviations & Variables
A: constant loan payment
AE: annuity equivalent
AIS: accrual income statement
AL: accrued liabilities
AP: accounts payable
APR: annual percentage rate
AR: accounts receivable
ATCF: after-tax cash flow
AVG: attachment value goods
CA: current assets
CE: cash expenses
CFS: coordinated financial statements
CL: current liabilities
COGS: cost of goods sold
CPI: consumer price index
CR: cash receipts
d: geometric decay
D: debt
Dep: depreciation
E: equity
EBIT: earnings before interest and taxes
EBT: earnings before taxes
EV: expected value-variance
FTC: Federal Trade Commission
FV: future values
g: nominal growth rate
g*: real growth rate
GAAP: generally accepted accounting practices
i: average interest rate
i (superscript): investment identifier
INV: inventories
IRR: internal rate of return
IRRA: internal rate of return on Assets
IRRE: internal rate of return on Equity
IRS: Internal Revenue Service
L: loan amount
LLC: Limited Liability Company
m: profit margin
MACRS: modified accelerated cost recovery system
MIRR: modified IRR
mn: term
MNPV: modified NPV
NIAT: net income after taxes
NPC: net present cost
NPV: net present value
NPVA: NPV for asset earnings
NPVE: NPV for equity earnings
NWC: net working capital
OE: overhead expense
p: percent of loan to be paid as a refinance cost
PV: present value
QTM: quantity theory of money
r: nominal discount rate
rf: APR
rm: market rate of interest
r*: real discount rate
R: constant value of net cash flow
constant value of cash deposits
Rti: cash flow earned by investment i in the tth period
R (bold): vector of cash flow values Rti earned by V0i
RCG: Realized Capital Gains
ROA: return on assets
ROE: return on equity
ROI: return on investment
S: units sold, liquidation value, sum of compounded periodic cash flows, standard deviation from a sample distribution
SCF: statement of cash flow
SEC: Securities and Exchange Commission
SEG: socio-emotional goods
T: tax
t (subscript): time period
TI: total interest
V0: initial value
W: firm’s wealth value
w: outcome variable
WCC: Weighted Cost of Capital
y: outcome variable
Excel Functions
FV: future value
IPMT: interest payment
IRR: internal rate of return
NPER: number of periods
NPV: net present value
PMT: period payment
PV: present value
RATE: rate
Functions
Cov(): covariance
E(): expected value operator
Pr(): probability
(r, Rti): Sum of periodic cash flows
US0(rf/m, mn): uniform series of $1 payments discounted at the actuarial rate for (mn) periods
Greek Characters
α (alpha): endogenous projection constant; tax adjustment rate for capital gains (losses)
β (beta): coefficient multiplying an exogenous variable
γ (gamma): scaling factor; rate of technological change; financed proportion of the purchase price; percentage between 0 and 100; change in L0; % of the investment’s value allowed to be deducted in a given year
∆ (Delta): difference / change
δ (delta): compounding / discounting factor; percent compensation for lost revenues
ϵt (epsilon): average error in the tth period
ϵ (epsilon): random variable component of a risky event
η (eta): capital gains (loss) rate
θ (theta): average tax adjustment coefficient
λ (lambda): average risk aversion coefficient
μ (mu): the expected value of a probability density function
π (pi): insurance premium paid to exchange a risky distribution with a sure value
ρ (rho): correlation coefficient between two random variables
σ (sigma): variance of a probability density function
Ratios
ATO: asset turnover ratio
ATOT: asset turnover time ratio
C: coverage ratio
CT: current ratio
CTR: current-to-total returns ratio
DE: debt-to-equity ratio
DS: debt-to-service ratio
EM: equity multiplier ratio
ITO: inventory turnover ratio
ITOT: inventory turnover time ratio
PE: price-to-earnings ratio
PTO: payable turnover ratio
PTOT: payable turnover time ratio
QK: quick ratio
RTO: receivable turnover ratio
RTOT: receivable turnover time ratio
SPELL: solvency, profitability, efficiency, liquidity, leverage
TIE: times interest earned ratio
