# 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

IRR^{A}: internal rate of return on Assets

IRR^{E}: 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

NPV^{A}: NPV for asset earnings

NPV^{E}: 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

r^{f}: APR

rm: market rate of interest

r^{*}: real discount rate

R: constant value of net cash flow

constant value of cash deposits

R_{t}^{i}: cash flow earned by investment i in the *t*^{th} period

**R** (bold): vector of cash flow values *R*_{t}^{i} earned by *V*_{0}^{i}

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

V_{0}: 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, R_{t}^{i}): Sum of periodic cash flows

US_{0}(r^{f}/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 *L*_{0; }% 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

ϵ_{t} (epsilon): average error in the *t*^{th} 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