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A to Z of business calculations

A glossary of business calculations, formulas and ratios from our collection of online reference books. Each entry includes a summary of what the calculation measures, why it's important and how it works in practice.

The entries in this A-Z have been sourced from the Business: The Ultimate Resource (A & C Black, 2011) and QFinance: The Ultimate Resource (A & C Black, 2014). Both titles are available to ICAEW members and ACA students through the Credo Reference collection.

A

Accounts receivable turnover

Annuity future value

Acid test ratio

Activity based costing

Accrual rate

Amortization

Annual percentage rate

Alpha value of a security

Asset utilization

Accounts payable turnover ratio

Asset turnover

B

Book value

Basis point value

Borrowing costs and capitzalization

Bond yield

Break even analysis

Beta value of a security

Bond current price

C

Conversion price

Convertible preferred stock

Conversion ratio

Covariance

Current ratio

Compound interest

Creditor days

Cost of goods sold

Capital asset pricing model

Current price of a bond

Central limit theorem

Capitalization ratios

Contribution margin

Capital expenditure

D

Depreciation

Dividend yield

Day sales outstanding

Discounted cash flow

Debt to capital ratio

Debt to equity ratio

Debtor days

E

Elasticity

Exchange rate risk

Ebitda

Earnings at risk

Enterprise value

Earnings per share

Economic value added

Expected rate of return

Efficiency and operating ratios

F

Fair value calculations

Forward interest rates

Future value

Future value of an annuity

G

Goodwill and patents

Gross profit margin ratio

H

I

Internal rate of return

Interest coverage

Interest rates

J

K

L

Liquidity ratio analysis

M

Marginal cost

Marginal rate of substitution

Market book ratio

N

Net present value

Nominal and real interest rates

Net added value and adjusted nav

O

Option pricing

P

Price elasticity

Price earnings ratio

Payback period

Present value

Price sales ratio

Portfolio analysis

Payout ratio

Q

R

Residual value

Return on investment

Return on sales

Reserve ratio

Risk adjusted rate of return

Return on shareholders equity

Rate of return

Return on assets

Real interest rates

S

Sharpe ratio

Statistical process control methods

Swap valuation

T

Treynor ratio

Time value of money

Total return

Term structure of interest rates

U

V-Z

Weighted average cost of capital

Working capital

Working capital productivity

Z score

Yield

Value at risk

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