# List of Abbreviations

- Page ID
- 12780

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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 |

r^{f} |
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 | |

R_{t}^{i} |
cash flow earned by investment i in the t^{th} period |
9 |

R (bold) |
vector of cash flow values R_{t}^{i} earned by V_{0}^{i} |
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, R_{t}^{i}) |
Sum of periodic cash flows | 9, 10 |

US0(r^{f}/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 L_{0} |
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 t^{th} 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 |