formula-sheet

CFA Level I Corporate Issuers Formula Sheet

Public formula sheet for WACC, capital budgeting, leverage, and working capital.

TL;DR

Corporate Issuers formulas connect financing costs to investment decisions. WACC, NPV, IRR, leverage, and working capital ratios are the key calculation set.

Formula Reference

WACC

WACC = (E/V)Re + (D/V)Rd(1 - T)

Include preferred stock if present.

NPV

NPV = sum[CF_t / (1 + r)^t] + CF0

Positive NPV adds value.

Payback period

Payback = years before recovery + unrecovered cost / next cash flow

Ignores time value unless discounted payback is specified.

Operating cycle

Operating cycle = days inventory on hand + days sales outstanding

Cash conversion cycle subtracts days payables.

BA II Plus Keystrokes

Use CF worksheet for project cash flows.
Use STO/RCL for WACC components.
Use cumulative sums for payback.

Worked Example

DIO = 50 and DSO = 30.
Operating cycle = 80 days.
If DPO = 20, cash conversion cycle = 60 days.

Common Mistakes

Forgetting preferred stock in WACC when provided.
Using IRR for mutually exclusive projects.
Confusing operating cycle with cash conversion cycle.

Related Guides

CFA Level I Corporate Issuers Calculations - NPV, IRR, WACC, cost of capital, leverage, and working-capital calculations.
NPV and IRR Calculations for CFA Level I - Capital budgeting guide for net present value, internal rate of return, and BA II Plus cash flow worksheet inputs.
BA II Plus: Cash Flow Worksheet Step by Step - Enter uneven and repeated cash flows correctly in the BA II Plus CF worksheet.