7. Financial
You can use the Financial Sticky Note to perform a variety of financial calculations.
Important!
Financial calculation rules and practices can differ according to country, geographic area, or financial institution.
It is up to you to determine whether the calculation results produced by the Financial Sticky Note are compatible with the financial calculation rules that apply to you.
 71. Financial Calculation Basic Operations
 72. Configuring Financial Settings
 73. Simple Interest
 74. Compound Interest
 75. Cash Flow
 76. Amortization
 77. Interest Conversion
 78. Cost/Sell/Margin
 79. Day Count
 710. Depreciation
 711. Bond Calculation
 712. BreakEven Point
 713. Margin of Safety
 714. Operating Leverage
 715. Financial Leverage
 716. Combined Leverage
 717. Quantity Conversion
71. Financial Calculation Basic Operations
711. Financial Sticky Note
712. Financial Calculation Example
The examples below explain basic operations using the Financial calculation.
Example: What is the final value after two years (730 days) of a $3,000 investment earning 5.0% simple interest? Also calculate the final value during the same period for the same investment when the simple interest rate is 3%.
1. Click anywhere on the Paper to display the Sticky Note menu.
2. Click to display a Financial Sticky Note.
3. Click [Simple Interest].
・This displays the Simple Interest Sticky Note.
4. Input the following information: Days = 730; I% (annual interest rate) = 5; PV (present value) = −3000.
5. Click [SI] and then [SFV].
・This displays the calculation results for simple interest (SI) and simple future value (SFV = principal + interest).
6. Change the I% value to 3, click [SI], and then [SFV].
・The SI and SFV values are updated in accordance with the new I% value.
72. Configuring Financial Settings
1. Click the Settings button () in the Paper header.
2. Click [Financial Settings].
・This displays the Financial Settings dialog box.
3. You can use this screen to configure settings below.
 Days in Year


360 days: Specifies calculation according to a 360 days. 
365 days: Specifies calculation according to a 365 days.

 Payment Date


Beginning of period: Specifies the beginning of period as the payment data. 
End of period: Specifies the end of period as the payment data.

 Odd Period


Compound (CI): Specifies compound interest to the odd period when performing a Compound Interest calculation. 
Simple (SI): Specifies simple interest to the odd period when performing a Compound Interest calculation. 
Off: Specifies no interest to the odd period when performing a Compound Interest calculation.

 Compounding Frequency


Annual: Specifies once a year compounding. 
Semiannual: Specifies twice a year compounding.

 Bond Interval


Term: Uses a number of payments as term for bond calculation. 
Date: Uses a date as term for bond calculation.

 Profit Amount/Ratio


Amount (PRF): Uses amount (PRF) for breakeven point calculations. 
Ratio (r%): Uses profit ratio (r%) for breakeven point calculations.

 BreakEven Value


Quantity: Uses quantity for breakeven point calculations. 
Sales: Uses sales amount for breakeven point calculations.

4. After settings are the way you want, click [OK].
Note
・Initial default settings are shown below.
 Days in Year: 365 days
 Payment Date: End of period
 Odd Period: Off
 Compounding Frequency: Annual
 Bond Interval: Term
 Profit Amount/Ratio: Amount (PRF)
 BreakEven Value: Quantity
The table below shows setting items for each type of Financial calculation.
Financial Calculation  Setting Items 

Simple Interest  Days in Year 
Compound Interest  Payment Date, Odd Period 
Amortization  Payment Date 
Day Count  Days in Year 
Bond Calculation  Days in Year, Compounding Frequency, Bond Interval 
BreakEven Point  Profit Amount/Ratio, BreakEven Value 
Note
 Clicking the button in the upper right corner of the Sticky Note displays certain Financial setting items. The setting items that appear depend on the type of financial calculation being performed. These settings are applied to the displayed Sticky Note.
73. Simple Interest
Simple Interest lets you calculate interest (without compounding) based on the number of days money is invested.
731. Simple Interest Fields
The following fields appear on the Simple Interest calculation.
Field  Description 

Days  Number of days in investment period 
I%  Annual interest rate (as a percent) 
PV  Present value (initial investment) 
SI  Calculates and displays simple interest 
SFV  Calculates and displays simple future value (principal + interest) 
732. Calculation Formulas
365day Mode
$ SI' = \cfrac{Dys}{365}\times{PV}\times{i} \qquad (i=\cfrac{I\%}{100}) $
360day Mode
$ SI' = \cfrac{Dys}{360}\times{PV}\times{i} \qquad (i=\cfrac{I\%}{100}) $
$ SI = SI' $
$ SFV = (PV + SI') $
74. Compound Interest
Compound Interest lets you calculate interest based on compounding parameters you specify.
741. Compound Interest Fields
The following fields appear on the Compound Interest calculation.
Field  Description 

N  Number of installment periods 
I%  Annual interest rate (as a percent) 
PV  Present value (initial investment) 
PMT  Amount paid each period 
FV  Future value 
P/Y  Number of installment periods per year 
C/Y  Number of times interest is compounded per year 
742. Calculation Formulas
・When calculating PV, PMT, FV, n
$ I \% \ne 0 $
$ PV = \cfrac{\alpha\times{PMT}\beta\times{FV}}{\gamma} $
$ PMT = \cfrac{\gamma\times{PV}\beta\times{FV}}{\alpha} $
$ FV = \cfrac{\gamma\times{PV}\alpha\times{PMT}}{\beta} $
$ n = \cfrac{log\left\{\cfrac{(1+iS)\times{PMT}FV\times{i}}{(1+iS)\times{PMT}+PV\times{i}}\right\}}{\log{(1+i)}} $
$ I \% = 0 $
$ PV = (PMT\times{n}+FV) $
$ PMT = \cfrac{PV + FV}{n} $
$ FV = (PMT\times{n}+PV) $
$ n = \cfrac{PV+FV}{PMT} $
$ \alpha=(1+i\times{S})\times\cfrac{1\beta}{i} $
When “Odd Period” is “Off”  When “Odd Period” is “CI”  When “Odd Period” is “SI”  
\( \beta= \)  \( \left(1+i\right)^{n} \)  \( \left(1+i\right)^{Ing\left(n\right)} \)  
\( \gamma= \)  1  \( \left(1+i\right)^{Frac\left(n\right)} \)  \( 1+i \times{Frac\left(n\right)} \) 
When “Payment Date” is “End”  When “Payment Date” is “Begin”  
\( S= \)  0  1 
When \( P/Y \) = \( C/Y \) = 1  When \( P/Y \) ≠ 1 and/or \( C/Y \) ≠ 1  
$ i= $  $ \cfrac{I \%}{100} $  $ {\left(1+\cfrac{I\%}{100\times\left[C/Y \right]}\right)}^{\cfrac{C/Y}{P/Y}}1 $ 
・When calculating \( I \) %
i (effective interest rate) is calculated using Newton’s Method.
$ \gamma\times{PV}+\alpha\times{PMT}+\beta\times{FV}=0 $
$ I $ % is calculated from i using the formulas below:
When \( P/Y \) = \( C/Y \) = 1  When \( P/Y \) ≠ 1 and/or \( C/Y \) ≠ 1  
$ I \% = $  $ i\times{10} $  $ \left( {\left( 1+i \right) }^{\cfrac{P/Y}{C/Y}}1 \right) \times C/Y \times{100} $ 
Interest (\( I \)%) calculations are performed using Newton’s Method, which produces approximate values whose precision can be affected by various calculation conditions. Interest calculation results produced by this application should be used keeping the above in mind, or results should be confirmed separately.
75. Cash Flow
Cash Flow lets you calculate the value of money paid out or received in varying amounts over time.
751. Cash Flow Fields
The following fields appear on the Cash Flow calculation.
Field  Description 

Cash  List of income or expenses (up to 80 entries) 
I%  Annual interest rate (as a percent) 
NPV  Net present value 
IRR  Interest rate of return 
PBP  Payback period 
NFV  Net future value 
752. To specify the list to be used by Cash Flow
1. On the Cash Flow Sticky Note, click the "Cash" field.
2. On the menu that appears, click "Add List".
 This displays a Data Sticky Note.
3. Input data to be used by Cash Flow into the Data Sticky Note.
4. Input the list name at the top of data you input.
5. On the Cash Flow Sticky Note, click the "Cash" field.
6. On the menu that appears, select the list to be used by Cash Flow.
Note
 When a variable is defined as a list type variable, it will appear in the "Cash" field pulldown menu. You can use a list type variable to perform Cash Flow calculations.
753. Calculation Formulas
$ NPV=CF_{0}+\cfrac{CF_{1}}{\left(1+i\right)}+\cfrac{CF_{2}}{{\left(1+i\right)}^{2}}+\cfrac{CF_{3}}{{\left(1+i\right)}^{3}}+ \cdots +\cfrac{CF_{n}}{{\left(1+i\right)}^{n}} \qquad \left(i=\cfrac{I\%}{100}\right) $
$ n $: natural number up to 80
$ NFV=NPV\times{\left(1+i\right)}^{n} $
IRR is calculated using Newton’s Method.
$ 0=CF_{0}+\cfrac{CF_{1}}{\left(1+i\right)}+\cfrac{CF_{2}}{{\left(1+i\right)}^{2}}+\cfrac{CF_{3}}{{\left(1+i\right)}^{3}}+ \cdots +\cfrac{CF_{n}}{{\left(1+i\right)}^{n}} $
In this formula, NPV = 0, and the value of IRR is equivalent to i×100. It should be noted, however, that minute fractional values tend to accumulate during the subsequent calculations performed automatically, so NPV never actually reaches exactly zero. IRR becomes more accurate the closer that NPV approaches to zero.
$ PBP=\begin{cases}0 .................. \left(CF_{0}\geq0\right)\\n\cfrac{NPV_{n}}{NPV_{n+1}NPV_{n}}...\left(Other\space than\space those\space above\right)\end{cases} $
$ n $: smallest positive integer that satisfies the conditions
$ NPV_{n}\leq 0 $, $0 \leq NPV_{n+1} $, or 0
76. Amortization
Amortization lets you calculate the interest and principal portions of a payment or payments.
761. Amortization Fields
The following fields appear on the Amortization calculation.
Field  Description 

PM1  Number of first installment period in interval under consideration 
PM2  Number of last installment period in interval under consideration 
I%  Annual interest rate (as a percent) 
PV  Present value (initial investment) 
PMT  Amount paid each period 
P/Y  Number of installment periods per year 
C/Y  Number of times interest is compounded per year 
BAL  Balance of principal after PM2 
INT  Interest portion of PM1 
PRN  Principal portion of PM1 
ΣINT  Total interest paid from PM1 to PM2 (inclusive) 
ΣPRM  Total principal paid from PM1 to PM2 (inclusive) 
762. Calculation Formulas
a: 
Interest portion of payment PM1 (INT) \( INT_{PM1}=\mid{BAL_{PM11} \times i}\mid\times\left(PMT_{sign}\right) \) 
b: 
Principal portion of payment PM1 (PRN) \( PRN_{PM1}=PMT+BAL_{PM11}\times{i} \) 
c: 
Principal balance upon completion of payment PM2 (BAL) \( BAL_{PM2}=BAL_{PM21}+PRN_{PM2} \) 
d: 
Total principal paid from payment PM1 to payment PM2 (ΣPRN) \( \sum_{PM1}^{PM2}PRN=PRN_{PM1}+PRN_{PM1+1}+ \) ... \( +PRN_{PM2} \) 
e: 
Total interest paid from payment PM1 to payment PM2 (ΣINT) ・a + b = one repayment (PMT) \( \sum_{PM1}^{PM2}INT=INT_{PM1}+INT_{PM1+1}+...+INT_{PM2} \) \( BAL_{0}=PV................ \) Payment: End (Format tab) \( INT_{1}=0,PRN_{1}=PMT... \) Payment: Begin (Format tab) 
Converting between the Nominal Interest Rate and Effective Interest Rate
The nominal interest rate (\( I \)% value input by user) is converted to an effective interest rate (\( I \)%') for installment loans where the number of annual payments is different from the number of annual compoundings calculation periods.
The following calculation is performed after conversion from the nominal interest rate to the effective interest rate, and the result is used for all subsequent calculations.
77. Interest Conversion
Interest Conversion lets you calculate the effective or nominal interest rate for interest that is compounded multiple times during a year.
771. Interest Conversion Fields
The following fields appear on the Interest Conversion calculation.
Field  Description 

N  Number of times interest is compounded per year 
EFF  Effective interest rate (as a percent) 
APR  Nominal interest rate (as a percent) 
772. Calculation Formulas
$ APR=\left[{\left(1+\cfrac{EFF}{100}\right)}^{\cfrac{1}{n}}1\right]\times{n}\times100 $
78. Cost/Sell/Margin
Cost/Sell/Margin lets you calculate the cost, selling price, or margin of profit on an item, given the other two values.
781. Cost/Sell/Margin Fields
The following fields appear on the Cost/Sell/Margin calculation.
Field  Description 

Cost  Production cost 
Sell  Selling price 
Margin  Margin of profit (portion of selling price not absorbed by cost of production) 
782. Calculation Formulas
$ SEL=\cfrac{CST}{1\cfrac{MRG}{100}} $
$ MRG\left(\%\right)=\left(1\cfrac{CST}{SEL}\right)\times100 $
79. Day Count
Day Count lets you calculate the number of days between two dates, or the date that is a specified number of days from another date.
791. Day Count Fields
The following fields appear on the Day Count calculation.
Field  Description 

d1  Date 1 
d2  Date 2 
Days  Number of days from d1 to d2 
710. Depreciation
Depreciation lets you calculate the amount that a business expense can be offset by income (depreciated) over a given year.
Note
 You can also click [SL] to calculate depreciation using straightline method, [FP] using fixedpercentage method, or [DB] using decliningbalance method. Each depreciation method will produce a different residual value after depreciation (RDV) for the applicable year (j).
7101. Depreciation Fields
The following fields appear on the Depreciation calculation.
Field  Description 

N  Number of times interest is compounded per year 
I%  Annual interest rate (as a percent) 
PV  Present value (initial investment) 
FV  Future value 
\( j \)  Year for which depreciation is being calculated 
YR1  Number of depreciable months in first year 
SL  Calculate depreciation for year j using the straightline method 
FP  Calculate depreciation for year j using the fixedpercentage method 
SYD  Calculate depreciation for year j using the sumoftheyears’digits method 
DB  Calculate depreciation for year j calculated using the decliningbalance method 
RDV  Residual value after depreciation for year \( j \) 
7102. Calculation Formulas
・StraightLine Method
$ SL_{j}=\cfrac{\left(PVFV\right)}{n} $
$ SL_{n+1}=\cfrac{\left(PVFV\right)}{n}\times\cfrac{12YR1}{12} $
$ (YR1 \ne 12) $
・FixedPercentage Method
$ FP_{j}=\left(RDV_{j1}+FV\right)\times\cfrac{I\%}{100} $
$ FP_{n+1}=RDV_{n} \qquad \left(YR1\neq12\right) $
$ RDV_{1}=PVFVFP_{1} $
$ RDV_{j}=RDV_{j1}FP_{j} $
$ RDV_{n+1}=0 \qquad \left(YR1\neq12\right) $
・SumoftheYears’Digits Method
$ n'=n\cfrac{YR1}{12} $
$ Z'=\cfrac{\left(Intg\left(n'\right)+1\right)\left(Intg\left(n'\right)+2\times{Frac\left(n'\right)}\right)}{2} $
$ SYD_{1}=\cfrac{n}{Z}\times\cfrac{YR1}{12}\left(PVFV\right) $
$ SYD_{j}=\left(\cfrac{n'j+2}{Z'}\right)\left(PVFVSYD_{1}\right) \qquad \left(j\neq1\right) $
$ SYD_{n+1}=\left(\cfrac{n'\left(n+1\right)+2}{Z'}\right)\left(PVFVSYD_{1}\right)\times\cfrac{12YR1}{12} \qquad \left(YR1\neq12\right) $
$ RDV_{1} = PVFVSYD_{1} $
$ RDV_{j} = RDV_{j1}SYD_{j} $
・DecliningBalance Method
$ RDV_{1}=PVFVDB_{1} $
$ DB_{j}=\left(RDV_{j1}+FV\right)\times\cfrac{I\%}{100n} $
$ RDV_{j}=RDV_{j1}DB_{j} $
$ DB_{n+1}=RDV_{n} \qquad \left(YR1\neq12\right) $
$ RDV_{n+1}=0 \qquad \left(YR1\neq12\right) $
711. Bond Calculation
Bond Calculation lets you calculate the purchase price or the annual yield of a bond.
7111. Bond Calculation Fields
The following fields appear on the Bond Calculation.
Field  Description 

d1  Purchase date 
d2  Redemption date 
N  Number of periods 
RDV  Redemption value 
CPN  Annual coupon rate 
PRC  Price of bond 
YLD  Yield to maturity (as a percent) 
INT  Interest accumulated during partial year portion of investment period 
Cost  Cost of bond (price plus partial year interest) 
7112. Calculation Formulas
・Terms in the formulas
 PRC: price per $100 of face value
 RDV: redemption price per $100 of face value
 CPN: coupon rate (%)
 YLD: annual yield (%)
 M: number of coupon payments per year
(1 = Annual, 2 = Semiannual)  N: number of coupon payments until maturity (n is used when “Term” is specified for “Bond Interval”.)
 INT: accrued interest
 CST: price including interest
 A: accrued days
 D: number of days in coupon period where settlement occurs
 B: number of days from purchase date until next coupon payment date = D – A
・PRC when “Date” is specified for “Bond Interval”
For one or fewer coupon period to redemption:
$ PRC=\cfrac{RDV+CPN/M}{1+\left(B/D\times\left(YLD/100\right)/M\right)}+A/D\times{CPN/M} $
For more than one coupon period to redemption:
$ PRC=\cfrac{RDV}{{\left(1+\left(YLD/100\right)/M\right)}^{ \left( N1+B/D \right) }} \quad  \sum_{k=1}^N\cfrac{CPN/M}{{\left(1+\left(YLD/100\right)/M\right)}^{\left( N1+B/D \right) }} \quad + A/D\times{CPN/M} $
$ INT=A/D\times{CPN/M} \qquad CST=PRC\times{INT} $
・PRC when “Term” is specified for “Bond Interval”
$ PRC=\cfrac{RDV}{{\left(1+\left(YLD/100\right)/M\right)}^{n}} \quad \sum_{k=1}^N\cfrac{CPN/M}{{\left(1+\left(YLD/100\right)/M\right)}^{k}} \qquad INT=0 \qquad CST=PRC $
・YLD
The Financial performs annual yield (YLD) calculations using Newton’s Method, which produces approximate values whose precision can be affected by various calculation conditions. Because of this, annual yield calculation results should be used keeping the above in mind, or results should be confirmed separately.
712. BreakEven Point
BreakEven Point lets you calculate the amount you must sell to break even or to obtain a specified profit, as well as the profit or loss on particular sales.
7121. BreakEven Point Fields
The following fields appear on the BreakEven Point calculation.
Field  Description 

PRC  Selling price per unit 
VCU  Variable cost per unit 
FC  Fixed costs 
PRF  Amount of profit realized 
QBE  Number of units to be sold 
SBE  Amount that must be obtained from sales to break even 
$r$%  Proportion of sales amount retained as a profit (as a percent) 
7122. Calculation Formulas
・Profit (Profit Amount/Ratio Setting: Amount (PRF))
$ SBE=\cfrac{FC+PRF}{PRCVCU}\times{PRC} $
・Profit Ratio (Profit Amount/Ratio Setting: Ratio (r%))
$ SBE=\cfrac{FC}{PRC\times\left(1\cfrac{r\%}{100}\right)VCU}\times{PRC} $
713. Margin of Safety
Margin of Safety lets you calculate how much sales can be reduced before losses are incurred.
7131. Margin of Safety Fields
The following fields appear on the Margin of Safety calculation.
Field  Description 

SAL  Amount obtained from sales 
SBE  Breakeven sales (amount that must be obtained from sales to break even) 
MOS  Margin of safety (portion of sales amount above breakeven point) 
7132. Calculation Formulas
714. Operating Leverage
Operating Leverage lets you calculate the degree of change in net earnings arising from a change in sales amount.
7141. Operating Leverage Fields
The following fields appear on the Operating Leverage calculation.
Field  Description 

SAL  Amount currently obtained from sales 
VC  Variable cost for this level of production 
FC  Fixed costs 
DOL  Degree of operating leverage 
7142. Calculation Formulas
715. Financial Leverage
Financial Leverage lets you calculate the degree of change in net earnings arising from a change in interest paid.
7151. Financial Leverage Fields
The following fields appear on the Financial Leverage calculation.
Field  Description 

EBIT  Earnings before interest and taxes 
INT  Interest to be paid to bondholders 
DFL  Degree of financial leverage 
7152. Calculation Formulas
716. Combined Leverage
Combined Leverage lets you calculate the combined effects of operation and financial leverages.
7161. Combined Leverage Fields
The following fields appear on the Combined Leverage calculation.
Field  Description 

SAL  Amount obtained from sales 
VC  Variable cost for this level of production 
FC  Fixed costs 
INT  Interest to be paid to bondholders 
DCL  Degree of combined leverage 
7162. Calculation Formulas
717. Quantity Conversion
Quantity Conversion lets you calculate the number of items sold, selling price, or sales amount given the other two values. It also lets you calculate the number of items manufactured, unit variable cost, or total variable cost given the other two values.
7171. Quantity Conversion Fields
The following fields appear on the Combined Leverage calculation.
Field  Description 

SAL  Amount obtained from sales 
PRC  Selling price per unit 
QTY  Number of units sold 
VC  Variable cost for this level of production 
VCU  Variable cost per unit 
QTY  Number of units manufactured 
7172. Calculation Formulas
\( VC=VCU\times{QTY} \)