Equations & Answers Flashcards
(31 cards)
Net Worth
Net Worth = Assets - Liabilities
Non-Profit Net Assets
Assets = Liabilities + Net Assets
Current Assets
Cash, Accounts and Notes Receivable, Inventory, and Prepaid Expenses
Non-current Assets
Long-Term Investments, Property and Equipment, and Intangible Assets
Current Liabilities
Accounts Payable, Notes Payable, Accrued Liabilities Payable
Non-Current Liabilities
all long-term debts
Equity or Contributed Capital
Investments made by stockholders in the Company’s common and preferred stock
Retained Earnings
Net Income, which has been invested in the entity since the start of its existence
Changes in Retained Earnings
Change in Retained Earnings = Contributed Capital + Retained Earnings
Partner’s Capital
Ending Capital = Beginning Capital + Net Income (or Net Loss) + Investment - Drawings
Net Income
Net Income (or Net Loss) = Revenues - Expenses
Net Sales
Net Sales = Gross Sales - Sales Discounts - Credit Card Discounts - Sales Returns and Allowances
Gross Margin (Gross Profit)
Gross Margin (Gross Profit) = Net Sales - Cost of Goods Sold (COGS)
Net Operating Income
Net Operating Income = Gross Margin - Operating Expenses
Income Before Income Taxes
Income before Income Taxes = Net Operating Income + Non-Operating Revenues and/or Gains - Non-operating Expenses and/or Losses
Net Income
Net Income = Income before Income Taxes - Income Taxes
Cash flows from operating activities
CFO = Cash from Customers + Interest + Dividends - Cash to Suppliers and Employees - Interest Paid - Income Taxes Paid
CFI (Cash flows from investing activities)
CFI = Sale of Plant and Equipment - Losses from Investment - Investment in Plant and Equipment
CFF (Cash Received from financing activities)
CFF = Cash Received from Issuing Stock or Debt - Cash Paid as Dividends for Reacquisition of Stock or Payment of Debt
Assets
Debits increase assets, Credits decrease assets
Liabilities
Debits decrease liabilities, Credits increase liabilities
Equity
Debits decrease equity, Credits increase equity
(ROE) Return on Equity
ROE = Net Income/ Average Stockholders’ Equity
(ROA) Return on Assets
ROA = (Net Income + Interest Expense/Average Total Assets
