User Manual

U(P - V) - F
Profit and Loss Analysis
•
Net income = (1 - tax)(net sales price - manufacturing expense - operating expense)
•
Net sales price = list price(1 - discount rate)
•
where operating expense represents a percentage of net sales price.
Securities
Discounted Notes
Price (given discount rate)
•
B = number of days in year (annual basis).
•
DR = discount rate (as a decimal).
•
DSM = number of days from settlement date to maturity date.
•
P = dollar price per $100 per value.
•
RV = redemption value per $100 par value.
•
P =
RV
-
DR x RV x
DSM
B
Yield (given price)
•
B = number of days in year (annual basis).
•
DSM = number of days from settlement date to maturity date.
•
P = dollar price per $100 par value.
•
RV = redemption value per $100 par value.
•
Y = annual yield of investment with security held to maturity (as a decimal).
•
Y =
RV - P
P
x
B
DSM
Forecasting