Chapter 4/5 Formulas Flashcards
(29 cards)
Acid test ratio
Quick assets / current liabilities
(cash+short term investments+receivables)/CL
Gross margin ratio
(Net sales - COGS) / Net sales
COGS
Net sales- gross profit
Net sales
cash sales + credit sales. - sales returns & allowances - sales discounts
Service company income
Revenues - expenses
Merchandise company income
Net sales- COGS = gross profit - expenses
Inventory formula
Ending inventory = Beginning inventory + purchases - COGS
Inventory Turnover
CGS/ AVG Inventory
Average Inventory
(BI+EI)/2
Days sales
(EI/CGS) x 365
Debt ratio
liabilities/ assets
Profit margin
NI/NS
Current Ratio
Current A / Current L
SL Depreciation
(Cost - SV) / UL
Days Sales in Inventory
(EI / CGS) x2
Percent of Sales
Current Sales x BD %
Percent of Receivables
Estimated BD - previous allowance acct balance
Interest
Principal x rate x time
AR Turnover
NS / Avg net AR
Depreciable Cost
Cost - SV
Book Value
Cost - AD
Changes in BV Estimates
(BV - New SV) / New UL
Asset Turnover
NS / Avg A
Debt to Equity
L / E
