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Financial formulas made practical

Financial formulas, calculators and worked examples

Find the formula you need, understand every input, calculate the result and follow a worked example before using your own figures.

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These sections keep related formulas together without combining different search intents on one page.

Cash-Flow Formulas

Measure cash generation, timing and investment returns with the right cash-flow structure.

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Valuation Formulas

Discount future cash flows, bridge enterprise and equity value, and compare return requirements.

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Financial Ratio Formulas

Calculate liquidity, leverage, growth, return and coverage ratios with consistent inputs.

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Profitability Formulas

Move from revenue to gross, operating and net profit without mixing the measures.

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Financial Statement Formulas

Connect revenue, expenses, working capital and retained earnings to the statements where they appear.

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Depreciation Formulas

Calculate depreciation expense and book value using clearly defined methods and estimates.

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Financial Modeling Templates and Browser Models

Build linked financial forecasts and schedules with visible drivers, formulas, scenarios, checks and editable workbook versions.

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Formula index

Financial formulas A–Z

78 researched formula, comparison and explainer pages.

AAnnuity FormulaFV = Payment × [((1 + r)ⁿ − 1) ÷ r]BBreak-Even FormulaFixed costs ÷ contribution marginCCAGR Formula(Ending value ÷ Beginning value)^(1 ÷ Years) − 1CCalculator Present ValuePV = FV ÷ (1 + r)ⁿCCap Rate FormulaNet operating income ÷ Property valueCCash Flow AnalysisCash flowCCash Flow DiagramCash flowCCash Flow ForecastCash flowCCash Flow StatementFinancial statementsCCompound Interest FormulaP(1 + r/n)ⁿᵗCCompound Interest Formula ExcelFV = P(1 + r/n)ⁿᵗCContinuous Compound Interest FormulaA = PeʳᵗCContribution Margin FormulaSales revenue − Variable costsCCost of CapitalValuationCCost of Equity FormulaRisk-free rate + Beta × (Market return − Risk-free rate)CCurrent Ratio FormulaCurrent assets ÷ Current liabilitiesCCustomer Lifetime Value FormulaAverage purchase value × Purchase frequency × Customer lifespanDDebt Schedule ModelFinancial modelsDDebt-to-Equity RatioTotal debt ÷ Shareholders’ equityDDepreciation Formula(Asset cost − Residual value) ÷ Useful lifeDDirect Method Cash FlowCash flowDDiscounted Cash FlowValuationDDouble Declining Depreciation FormulaBeginning book value × (2 ÷ Useful life)DDoubling Time Formulaln(2) ÷ ln(1 + r)EEbit FormulaRevenue − Cost of goods sold − Operating expensesEEBITDA FormulaEBIT + Depreciation + AmortizationEEquity Value FormulaEnterprise value − Debt + CashFFinancial Interest DefinitionInterest and growthFFinancing Cash FlowCash flowFFree Cash FlowCash flowFFuture Value FormulaFV = PV(1 + r)ⁿGGross Margin FormulaGross profit ÷ RevenueGGross Profit FormulaRevenue − Cost of goods soldGGross Profit vs Net ProfitProfitabilityGGrowth Rate Formula(New value − Old value) ÷ Old valueHHow to Calculate Interest Rate Per Month(Future value ÷ Present value)^(1 ÷ Periods) − 1HHow to Calculate ProfitRevenue − Total costsIIncome Statement FormulaRevenue − Expenses = Net incomeIInterest Calculator SavingsP(1 + r/n)ⁿᵗIInterest Coverage RatioFinancial ratiosIInterest Definition FinanceInterest and growthIInterest IncomeFinancial statementsIInternal Rate of Return FormulaCash flowIInvestment Growth CalculatorEnding value − Starting value − ContributionsMMarginal Cost FormulaChange in total cost ÷ Change in quantityNNet Cash FlowCash flowNNet Income FormulaRevenue − All recognized expensesNNet Operating Income FormulaGross operating income − Operating expensesNNet Present Value FormulaΣ CFₜ ÷ (1 + r)ᵗNNet ProfitProfitabilityNNet Profit Margin FormulaNet income ÷ RevenueOOperating Cash Flow FormulaNet income + Noncash expenses − Increase in working capitalOOperating Margin FormulaOperating income ÷ RevenuePPayback Period FormulaInitial investment ÷ Equal annual cash inflowPPresent Value of Annuity FormulaPV = Payment × [1 − (1 + r)⁻ⁿ] ÷ rPPrice Equity Ratio FormulaMarket price per share ÷ Earnings per sharePPrincipal and InterestInterest and growthPProfit and LossFinancial statementsPProfit and Loss Statement ExampleFinancial statementsPProfit DefinitionProfitabilityPProfit MarginProfitabilityPProfit MotiveProfitabilityPProfit SharingProfitabilityPProfit TreeBusiness planningRRetained Earnings FormulaBeginning retained earnings + Net income − DividendsRReturn On AssetsFinancial ratiosRReturn On Equity Ratio FormulaNet income ÷ Average shareholders’ equityRReturn on Investment Formula(Gain from investment − Cost of investment) ÷ Cost of investmentRRevenue Forecast ModelFinancial modelsRRevenue FormulaPrice per unit × Quantity soldRRevenue vs ProfitProfitabilitySSimple Interest FormulaI = P × r × tSSimple Interest Loan CalculatorInterest = Principal × Rate × TimeSSimple Interest vs Compound InterestInterest and growthSStraight Line Depreciation Formula(Asset cost − Residual value) ÷ Useful lifeTThree-Statement Financial ModelFinancial modelsTTimes Interest Earned RatioFinancial ratiosWWorking Capital FormulaCurrent assets − Current liabilities

How to use a financial formula correctly

Start with the decision, not the equation. Confirm that every input uses the same period and definition, reproduce the worked example, then enter your own figures. A calculator can perform the arithmetic, but the limitations section tells you whether the result fits your question.

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