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List of Abbreviations

  • Page ID
    12780
  • Table: List of Abbreviations
    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
    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
    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