| Value |
Description |
Chapter |
| A |
constant loan payment |
16 |
| AE |
annuity equivalent |
8, 10, 12, 13 |
| AIS |
accrual income statement |
4, 5, 6, 12, 13 |
| AL |
accrued liabilities |
12, 13 |
| AP |
accounts payable |
5, 12, 13 |
| APR |
annual percentage rate |
16 |
| AR |
accounts receivable |
12, 13 |
| ATCF |
after-tax cash flow |
3, 12, 13 |
| AVG |
attachment value goods |
21 |
| CA |
current assets |
5 |
| CE |
cash expenses |
5, 12 |
| CFS |
coordinated financial statements |
4, 5, 6 |
| CL |
current liabilities |
5 |
| COGS |
cost of goods sold |
4, 5, 6, 12 |
| CPI |
consumer price index |
14 |
| CR |
cash receipts |
12 |
| d |
geometric decay |
11 |
| D |
debt |
5, 6, 7, 8, 15 |
| Dep |
depreciation |
3, 12 |
| E |
equity |
5, 6, 7, 8, 15 |
| EBIT |
earnings before interest and taxes |
4, 5, 6, 12 |
| EBT |
earnings before taxes |
4, 5, 6, 12 |
| EV |
expected value-variance |
15 |
| FTC |
Federal Trade Commission |
5 |
| FV |
future values |
19 |
| g |
nominal growth rate |
17 |
| g* |
real growth rate |
17 |
| GAAP |
generally accepted accounting practices |
4 |
| i |
average interest rate |
8, 9, 10, 14, 15, 16 |
| i (superscript) |
investment identifier |
9, 10, 15 |
| INV |
inventories |
5, 6 |
| IRR |
internal rate of return |
9, 10, Appendix |
| IRRA |
internal rate of return on Assets |
12, 13 |
| IRRE |
internal rate of return on Equity |
12, 13 |
| IRS |
Internal Revenue Service |
2, 3, 12 |
| L |
loan amount |
16 |
| LLC |
Limited Liability Company |
2 |
| m |
profit margin |
5, 6, 10, 15, 16, 19, Appendix |
| MACRS |
modified accelerated cost recovery system |
12 |
| MIRR |
modified IRR |
9, 10 |
| mn |
term |
16 |
| MNPV |
modified NPV |
9, 10 |
| NIAT |
net income after taxes |
4, 5, 6, 12 |
| NPC |
net present cost |
18 |
| NPV |
net present value |
7–21 |
| NWC |
net working capital |
5 |
| OE |
overhead expense |
4, 5, 6 |
| p |
percent of loan to be paid as a refinance cost |
16 |
| PV |
present value |
1, 2, 7–20, Appendix |
| QTM |
quantity theory of money |
14 |
| r |
nominal discount rate |
7–20, Appendix |
| rf |
APR |
14, 16 |
| rm |
market rate of interest |
7 |
| r* |
real discount rate |
17 |
R
|
constant value of net cash flow |
8, 10, 11, 14, Appendix |
| constant value of cash deposits |
19 |
| Rti |
cash flow earned by investment i in the tth period |
9 |
| R (bold) |
vector of cash flow values Rti earned by V0i |
9 |
| RCG |
Realized Capital Gains |
12 |
| ROA |
return on assets |
5–8, 12, 15, Appendix |
| ROE |
return on equity |
5–8, 12, 15, Appendix |
| ROI |
return on investment |
7, 12 |
| S |
units sold |
6 |
| liquidation value |
7, 8 |
| sum of compounded periodic cash flows |
9, 10,17 |
| standard deviation from a sample distribution |
15 |
| SCF |
statement of cash flow |
4, 12 |
| SEC |
Securities and Exchange Commission |
5 |
| SEG |
socio-emotional goods |
21 |
| T |
tax |
3, 5, 11, 12 |
| t (subscript) |
time period |
7, 9–18 |
| TI |
total interest |
16 |
| V0 |
initial value |
7–15, 17–20, Appendix |
| W |
firm’s wealth value |
15 |
| w |
outcome variable |
15 |
| WCC |
Weighted Cost of Capital |
12 |
| y |
outcome variable |
15 |
| Excel Functions |
| FV |
future value |
19, Appendix |
| IPMT |
interest payment |
16 |
| IRR |
internal rate of return |
Appendix |
| NPER |
number of periods |
Appendix |
| NPV |
net present value |
Appendix |
| PMT |
period payment |
Appendix |
| PV |
present value |
Appendix |
| RATE |
rate |
Appendix |
| Functions |
| Cov() |
covariance |
15 |
| E() |
expected value operator |
15 |
| Pr() |
probability |
15 |
| S(r, Rti) |
Sum of periodic cash flows |
9, 10 |
| US0(rf/m, mn) |
uniform series of $1 payments discounted at the actuarial rate for (mn) periods |
16 |
| Greek Characters |
| ∆ (Delta) |
difference / change |
4, 12, 13, 16 |
| α (alpha) |
endogenous projection constant |
13 |
| tax adjustment rate for capital gains (losses) |
17 |
| β (beta) |
coefficient multiplying an exogenous variable |
13, 15 |
| γ (gamma) |
scaling factor |
9 |
| rate of technological change |
10 |
| financed proportion of the purchase price |
14 |
| percentage between 0 and 100 |
15 |
| change in L0 |
16 |
| % of the investment’s value allowed to be deducted in a given year |
18 |
| δ (delta) |
compounding / discounting factor |
9, 10 |
| percent compensation for lost revenues |
15 |
| ϵt (epsilon) |
average error in the tth period |
13 |
| ϵ (epsilon) |
random variable component of a risky event |
15 |
| η (eta) |
capital gains (loss) rate |
14 |
| θ (theta) |
average tax adjustment coefficient |
11, 17, 18, 19 |
| λ (lambda) |
average risk aversion coefficient |
15 |
| μ (mu) |
the expected value of a probability density function |
15 |
| π (pi) |
insurance premium paid to exchange a risky distribution with a sure value |
12, 15 |
| ρ (rho) |
correlation coefficient between two random variables |
15 |
| σ (sigma) |
variance of a probability density function |
15 |
| Ratios |
| ATO |
asset turnover ratio |
6 |
| ATOT |
asset turnover time ratio |
6 |
| C |
coverage ratio |
14 |
| CT |
current ratio |
6, 16 |
| CTR |
current-to-total returns ratio |
14 |
| DE |
debt-to-equity ratio |
6 |
| DS |
debt-to-service ratio |
6 |
| EM |
equity multiplier ratio |
6 |
| ITO |
inventory turnover ratio |
6 |
| ITOT |
inventory turnover time ratio |
6 |
| PE |
price-to-earnings ratio |
6, 14 |
| PTO |
payable turnover ratio |
6 |
| PTOT |
payable turnover time ratio |
6 |
| QK |
quick ratio |
6 |
| RTO |
receivable turnover ratio |
6 |
| RTOT |
receivable turnover time ratio |
6 |
| SPELL |
solvency, profitability, efficiency, liquidity, leverage |
6 |
| TIE |
times interest earned ratio |
6, 16 |
