Capital Asset Pricing Model (CAPM) is a theory which is used to price an asset in the context of its risk. CAPM is a model that illustrates the relationship between systematic risk and expected rate of return of a portfolio of financial assets (for example shares and bonds). CAPM can be used to … Read More about Capital Asset Pricing Model Formula

## Yield to Maturity Formula

The yield to maturity formula, also known as book yield or redemption yield, is used in finance to calculate the yield of a bond at the current market price. It is calculated to compare the attractiveness of investing in a bond with other investment opportunities. YTM (Yield to Maturity) is the … Read More about Yield to Maturity Formula

## Debt Ratio Formula

Debt ratio is a financial ratio representing the ratio of external financing (total liabilities and provisions) to total assets and is used in the analysis of the capital structure. It determines the extent to which the company is funded by external financing and to which by its own capital. This … Read More about Debt Ratio Formula

## Annual Percentage Yield Formula

APY (Annual Percentage Yield) is a compound interest rate owned on a deposit over one year. It accounts the interest earned on principal as well as interest earned on other earnings and is referenced as the effective annual rate in finance. Annual Percentage Yield assumes that all the funds will … Read More about Annual Percentage Yield Formula

## Present Value of Annuity Due Formula

The Present Value of Annuity Due formula is used to calculate the present value of a series of cash flows, or periodic payments, that are generated by an investment in the future. These payments are expected to be made on predetermined future dates and in predetermined amounts. Present Value of … Read More about Present Value of Annuity Due Formula

## Future Value of Annuity Formula

The future value of annuity formula is used to calculate the value of a series of periodic payments at a future date. This can be useful in determining how much you would have in future if you know how much you’re able to invest per period. It can also be helpful to compute the total cost of a … Read More about Future Value of Annuity Formula

## Net Present Value Formula

Net Present Value (NPV) is a method of evaluation of economical effectiveness of investment. NPV is used to calculate the difference between the value of all present and future cash flows discounted to the present, both negative and positive, over the whole life of the investment. The NPV … Read More about Net Present Value Formula

## Current Ratio Formula

The current ratio is one of the liquidity ratios which measures a company’s ability to pay its short term liabilities with its assets. This is a good way to measure overall liquidity as short-term liabilities are due within the next year, giving the company only a short amount of time to raise … Read More about Current Ratio Formula

## Quick Ratio Formula

Quick ratio or acid test ratio is one of the liquidity ratios which measures a company’s ability to pay its short-term, current liabilities with its most liquid (or quick) assets. Quick assets are current assets which can be converted to cash quickly (within 90 days). Examples of quick assets … Read More about Quick Ratio Formula

## Annuity Payment Formula

The annuity payment formula is used to calculate the regular payment on an annuity - a series of payments received at a future date. This is the exact same formula used in loan payments. Where P = the payment, PV = the present value, r = the rate per loan period, and n = the number of … Read More about Annuity Payment Formula