# equity line calculator

### Pages to are hidden for

"equity line calculator"

```					Critical Financial Calculators

Jill Edwards
Ben Franklin Venture
Investment Forum
Balance Sheet Basics
• Current Assets
• Current Liabilities
• Total Assets
• Total Liabilities
• Equity
Income Statement Basics

• Net Sales

• Variable Expenses

• Fixed Expenses

• Net Income
What Does it Cost to

Old SG&A = \$100,000 = 25% of sales

So Old Sales = \$400,000

Add an employee at \$25,000 compensation

So New SG&A = \$125,000 = 25% of sales

So New Sales = \$500,000
Ratios
Current ratio         current assets
current liabilities

Gross margin %        gross margin
net sales

Debt/worth            total liabilities
net worth
More Ratios
A/R Turnover         Net Sales
Accounts Receivable
A/R Days             365
A/R Turnover
Inventory Turnover   CGS
Inventory
Inventory Days       365
Inventory Turnover
A/P Turnover         CGS
A/P
A/P Days             365
A/P Turnover
Operating Cycle

Inventory Days + A/R Days = Operating Cycle

If Operating Cycle > A/P Days → Cash Gap

If A/P Days > Stated Payment Terms → May have
trouble with suppliers
Calculating Breakeven

How many units do I have to
sell to break even?

Breakeven = Fixed Cost/
(Unit Price – Variable Cost Price)
Breakeven Calculation
Scenario 1           Scenario 2
Fixed Costs               \$140,000.00          \$140,000.00
Variable Unit Cost                   \$.97                 \$.97
Expected Unit Sales           150,000              150,000
Unit Price                          \$1.99                \$2.79
Total Variable Cost       \$145,500.00          \$145,500.00
Total Costs               \$285,500.00          \$285,500.00
Total Revenue             \$298,500.00          \$418,500.00
Profit/Loss                 \$13,000.00         \$133,000.00
Breakeven                     137,255               76,923
Growth Calculations
Net Income     100,000

Total Assets   400,000

ROA                .25

Dividends       40,000

Equity         300,000

ROE                .33

Plowback (B)       .60
Internal Growth Rate

IGR = (ROA x B) ÷
[1-(ROA x B)]
Sustainable Growth Rate

SGR = (ROE x B) ÷
[1 – (ROE x B)]
RMA Statement Studies

http://www.rmahq.org/RMA/

• Available in Most
College Libraries

Critical Financial Calculators
Jill Edwards
Ben Franklin Venture
Investment Forum

jilledwards@psu.edu

```
DOCUMENT INFO
Shared By:
Categories:
Stats:
 views: 17 posted: 12/21/2008 language: English pages: 14