BFM CHEAT SHEET | CAIIB FREE MATERIAL & NOTES | JUNE 2023 EXAMS

BFM CHEAT SHEET | CAIIB FREE MATERIAL & NOTES | JUNE 2023 EXAMS

In this CAIIB article, we will provide the CAIIB candidates preparing for the NOV/DEC 2022 attempt the cheat sheet for preparation of the Bank Financial Management Exam of CAIIB i.e. Paper-2.

This BFM formula sheet or cheat sheet will help you immensely in preparing for the CAIIB syllabus 2023 & help you solve the BFM numerical problem. So, don’t wait anymore, bookmark this article & cram them up if you have to…. just get it memorised.

But before you go & take a look, we want you to consider taking up our crash course for quick revision of whole BFM Topic. Just Click here.

CHEAT SHEET OF CAIIB BANK FINANCIAL MANAGEMENT | UPDATED FORMULA SHEET 

All these formulas will help you to understand the concepts of Bank Financial Management. You should note that all these formulas might not be applicable for the CAIIB paper of BFM, but it is important that you go through them so that all the concepts of both ABM and BFM are clear.

• Raw material Turnover Ratio = Cost of RM used ÷ Average stock of R M

• SIP Turnover = Cost of Goods manufactured ÷ Average stock of SIP 

• Debt Collection period = No. days or months or Weeks in a year ÷ Debt Turnover Ratio.

• Average Payment Period = No. days or months or Weeks in a year ÷ Creditors Turnover Ratio.

• Inventory Turnover Ratio = Cost of Goods Sold ÷ Average Inventory.

• Debtors Turnover Ratio = Net Credit Sales ÷ Average Debtors.

• Creditors Turnover Ratio = Net Credit Purchases ÷ Average Credits.

• Defensive Interval Ratio = Liquid Assets ÷ Projected Daily Cash Requirement

• Projected daily cash requirement = Projected operating cash expenses ÷ 365

• Debt Equity Ratio = Long Term Debt ÷ Equity

or Debt Equity Ratio = Total outside Liability ÷ Tangible Net Worth.

• Debt to Total Capital Ratio = Total Debts or Total Assets ÷ (Permanent Capital + Current Liabilities)

• Interest Coverage Ratio = EBIT ÷ Interest.

• Dividend Coverage Ratio = Net Profit after Interest & Tax ÷ Preferential dividend

• Gross Profit Margin = Gross Profit ÷ Net Sales * 100

• Net Profit Margin = Net Profit ÷ Net Sales * 100

• Cost of Goods Sold Ratio = Cost of Goods Sold ÷ Net Sales * 100.

• Operating Profit Ratio = Earnings Before Interest Tax ÷ Net Sales * 100

• Expenses Ratio or Operating Ratio = Expenses ÷ Net Sales * 100

• Net Profit Ratio = Net Profit After interest and Tax ÷ Net Sales * 100

• Operating Expenses Ratio = (Administrative + Selling expenses) ÷ Net Sales * 100

• Administrative Expenses Ratio = (Administrative Expenses ÷ Net Sales) * 100

• Selling Expenses Ratio = (Selling Expenses ÷ Net Sales) * 100

• Financial Expenses Ratio = (Financial Expenses ÷ Net Sales) * 100

• Return on Assets = Net Profit After Tax ÷ Total Assets.

• Total Assets = Net Fixed Assets + Net Working Capital.

• Net Fixed Assets = Total Fixed Assets – Accumulated Depreciation.

• Net Working Capital = (CA – CL) – (Intangible Assets + Fictitious Assets + Idle Stock + Bad Debts)

• Return on Capital Employed = Net Profit Before Interest and Tax ÷ Average Capital Employed.

• Average Capital employed = Equity Capital + Long Term Funds ÷ (Owners & Creditors at the beginning & at the end of the accounting period ÷ 2).

• Return on Ordinary Share Holders Equity = (Net Profit After Tax – Preferential Dividends) ÷ Average Ordinary Share Holders Equity or Net Worth.

• Earnings Per Share = Net Profit After Taxes and Preferential dividends ÷ Number of Equity Share.

• Dividend per Share (DPS) = Net Profit After Taxes and distributable dividend ÷ Number of Equity Shares.

• Dividend Pay Out Ratio = Dividend per Equity Share ÷ Earnings per Equity Share.

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Dividend Pay Out Ratio = Dividend paid to Equity Share-holders ÷ Net Profit available for Equity Share Holders.

• Price Earnings Ratio (P/E) = Market Price per equity Share ÷ Earning per Share.

• Total Asset Turnover = Cost of Goods Sold ÷ Average Total Assets.

• Fixed Asset Turnover = Cost of Goods Sold ÷ Average Fixed Assets.

• Capital Turnover = Cost of Goods Sold ÷ Average Capital employed

• Current Asset Turnover = Cost of Goods Sold ÷ Average Current Assets.

• Working Capital Turnover = Cost of Goods Sold ÷ Net Working Capital.

• Return on Net Worth = (Net Profit ÷ Net Worth) * 100

• DSCR = Profit after Tax & Depreciation + Interest on Term Loans & Differed Credit + Lease Rentals, if any, ÷ Repayment of Interest & Installments on Term Loans & deferred Credits + Lease Rentals, if any.

• Factory Cost = Prime cost + Production Overheads.

• Cost of Goods Sold (COGS)= Factory Cost + Selling, distribution & administrative overheads

• Contribution = Sales – Marginal Costs.

• Percentage of contribution to sales = (Contribution ÷ Sales) * 100

• Break Even Analysis (BEP) = F ÷ (1 – VC ÷ S) 

Where F = Fixed costs, VC = Total variable operating costs & S = Total sales revenue

• Break Even Margin or Margin of Safety = Sales – Break Even Point ÷ Sales.

• Cash Break Even = F – N ÷ P – R or F – N ÷ 1 – (VC ÷ S)

• BEP (Break Even Point) = Fixed Costs ÷ Contribution per unit.

• Sales volume requires = Fixed cost + Required profit ÷ Contribution per unit.

• BEP in Sales = (Fixed Costs ÷ Contribution per unit) * Price per unit.

• Contribution Sales Ratio = (Contribution per unit ÷ Sale price per unit) * 100

• Level of sales to result in target profit after Tax = (Target Profit) ÷ (1 – Tax rate ÷ Contribution per unit)

• Level of sales to result in target profit = (Fixed Cost + Target profit) * sales price per unit Contribution per unit.

• Net Present Value = – Co + C1 ÷ (1 + r)

• Future expected value of a present cash flow = Cash Flow (1 + r) ^ t

• Present value (simple future cash flow) = Cash Flow ÷ (1 + r) ^ t

• Discount Factor = 1 ÷ (1 + r) ^ t

• Notation used internationally for PV of an annuity is PV (A, r, n)

• Notation used internationally for FV of an annuity is FV (A, r, n)

• Effective Annual Rate = (1 + r) ^ t – 1 or (1 + (r ÷ N)) – 1) 

N = Number of times compounding is done in a year

• PV of end of period Annuity = A {(1- (1 ÷ (1+r) ^ n) ÷ r}

• Current Ratio = CA : CL

• Net Worth = CA – CL

• Debt Equity Ratio = TL ÷ TNW or debt ÷ equity or TL ÷ equity

• Price Elasticity of Supply = (% change in quantity supplied ÷ (% change in price)

• Present Value (PV) = P ÷ R * [(1+R) ^ T – 1] ÷ (1+R) ^ T

• Present Value = P ÷ (1+R) ^ T

• Future Value (FV) = P * (1 + R) ^ T

or FV = P * (1-R) ^ T

or FV = P ÷ R * [(1+R) ^ T – 1]

or FV = P ÷ R * [(1+R) ^ T – 1] * (1+R)

• Equated Monthly Installments (EMIs)= P * R * [(1+R) ^ T ÷ (1+R) ^ T-1)]

• Future Value of annuity = A ÷ r ×{(1+r) ^ n-1}

• Bond Price = (1 ÷ (1+R) ^ t) ((coupon*((1+R) ^ t-1) ÷ R) + Face Value)

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