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Balance Sheet/Income Statement/Capital Budgeting Cheat Sheet (DRAFT) by

Balance Sheet and Income Statement

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Balance Sheet

Term
Definition
Current Assets
Fixed Assets
Current Liabil­ities
Long Term Debt
Preferred Stock
Common Equity
 

Income Statement

Term
Definition
 

Formulas

 

Capital Budgeting Techniques

Term
Definition
Excel
Payback Period
The number of years required to recover a project's cost or how long it take to get the business's money back
N
Discounted Payback Period
The number of years required to recover a project's cost or how long it take to get the business's money back; future cash flows discounted to time zero
N
Net Present Value (NPV)
Sum of the present value of inflows and outflows
Y
Internal Rate of Return (IRR)
The discount rate at which inflows is equal to cost, or where net present value is equal to zero
Y
Modified Internal Rate of Return (MIRR)
IRR based on WACC
Y
Profit­ability Index (PI)
Shows relative profit­ability of project (present value of future cash flows per dollar of initial cost)
N

Capital Budgeting Choosing Projects

Project Metric
Choice of Projects
NPV > 0
Higher NPV
IRR > WACC
Higher IRR
MIRR > WACC
Higher MIRR