A zero-coupon bond is a type of bond that doesn’t make coupon payments. This type of bond is issued with a big discount to its face value. At the time of maturity, the bondholder receives the face value of the bond, which means that the current price has to be lower than the face price. The … Read More about Zero Coupon Bond Value Formula

## Rule of 72 Formula

The Rule of 72 formula is one of the simple and quick methods that are used to calculate an investment’s doubling time. Doubling time is the amount of time that it takes for a certain amount of money to double in its value. Doubling time is applied not only to money but also to other resources … Read More about Rule of 72 Formula

## Present Value Annuity Factor Formula

The present value annuity factor formula is a simplified version of the present value of an annuity formula. It is a factor that is used to calculate the present value of one dollar cash flows. This factor can be multiplied by a periodic payment (larger than one dollar) to find out what present … Read More about Present Value Annuity Factor Formula

## Payback Period Formula

The payback period formula is one of the methods used to analyse investment projects. It’s time that needed to reach a break-even point, i.e. a period of time in which the cost of investment is expected to be covered with cash flows from this investment. Payback period (PP) is not used to … Read More about Payback Period Formula

## Doubling Time Formula

The doubling time formula is used in finance to calculate the amount of time that it takes for a certain amount of money to double in value. Doubling time is applied not only to money but also to other resources and investments, inflation, consumption of goods and services, population growth and … Read More about Doubling Time Formula

## Days in Inventory Formula

The days in inventory formula calculates the ratio that is used to measure how fast a company transforms its inventory into sales. In other words, it’s a number of days that is needed for inventory to transform into cash. Days in inventory or inventory days of supply measures how many times a … Read More about Days in Inventory Formula

## Geometric Mean Return Formula

The geometric mean return formula is a way to calculate the average rate of return per period on investment that is compounded over multiple periods. It allows understanding the effect of compounding of a portfolio of financial instruments (investments). Compounding is a process of reinvesting … Read More about Geometric Mean Return Formula

## Net Profit Margin Formula

The net profit margin formula (or profitability of sales) is a ratio that describes how much profit a company gets from its total revenue. It is a percentage of sales that is left after subtracting all operating expenses, taxes, interest and preferred stock dividends. Net profit margin is a … Read More about Net Profit Margin Formula

## Net Working Capital Formula

The formula for net working capital (NWC) calculates the amount of money that is left after a company pays its short-term liabilities with its current assets. In other words, it is a difference between a company’s current assets and its current liabilities. It’s used to find out if a company has … Read More about Net Working Capital Formula

## Return on Assets Formula

The return on assets formula calculates the net earnings generated by total assets during a period of time. Also known as ROA, this financial ratio shows how effectively a company uses its assets to generate money. It tells an investor or a manager how much after-tax profit each dollar of assets … Read More about Return on Assets Formula