FPSC - Certified Financial Planner

CANADIAN CERTIFIED FINANCIAL PLANNERS' SYLLABUS

Page: 1 of 5 | 2 of 5 | 3 of 5 | 4 of 5 | Appendix

11 A. TYPES AND MEASURES OF INVESTMENT RETURNS

FV = future value	e = effective, annual rate of return
PV = present value	k = periodic rate of return (i/m)
i = nominal, annual rate of return	r = real, annual rate of return
n = number of years	y = yield to maturity, or IRR
m = number of compounding periods per year	infl = annual rate of inflation
It = amount returned or paid in year t	s = sample standard deviation

Future value of a single payment

Present value of a single payment

The effect of non-annual compounding

Simple interest (return) calculation

Effective, annual rate

Real rate of return

Current Yield

for a bond

	Annual Interest Payment
=
	Current Market Price

for a stock

	Annual Dividend Payment
=
	Current Market Price

Time-weighted average return

	arithmetic method
	geometric method

Sample standard deviation

Holding period return

	Ending Value of Investment
=		-1
	Beginning Value of Investment

Total return:

	sales proceeds-purchase price+all net cash flows+reinvestment income
=
	purchase price

11 B. FINANCIAL STATEMENT RATIO ANALYSIS

Current Ratio

	current assets
=
	current liabilities

Quick Ratio

	Cash+Cash equivalents+accounts receivable
=
	Current Liabilities

Debt-to-equity ratio

	Total Debt
=
	Closing bookvalue of Shareholders Equity

Debt-to-total assets ratio

	Total Debt
=
	Closing Total Assets

Interest Coverage ("times interest earned")

	Income from Operations
=
	Annual Interest Expense

Net profit margin

	Net Profit
=
	Net Sales

Gross profit margin

	Gross Profit
=
	Gross Sales

Return on common equity

	Net income
=
	Closing Common Equity

Return on total assets

	Net Income
=
	Closing Total Assets

Earnings per common share

	Net income(before extraordinary items) - preferred dividends
=
	average number of common shares outstanding

Price/earnings ratio (P/E multiple)

	Current Market Price of Common Share
=
	Earnings per Share (in latest 12 month period)

Asset turnover

	Net Sales
=
	Closing Total Assets

Inventory Turnover

	Cost of Goods Sold
=
	Closing Inventory

Receivable Turnover

	Credit Sales
=
	Closing Accounts Receivable

Working capital (expressed in $)

Dividend payout

	Total dividends(Preferred or Common)
=
	Net Income

Market capitalization

Page: 1 of 5 | 2 of 5 | 3 of 5 | 4 of 5 | Appendix

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