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Flashcards in FAR-Formulas Deck (11):
1

What is the formula for Inventory Turnover?

Cost of goods sold / Average inventory

2

What is the formula for Gross Margin?

Sales - COGS

3

What is the formula for Working Capital?

Current Assets - Current Liabilities.

4

What is the formula for Earnings Per Share?

Net income / average outstanding common shares

5

What is the formula for the PE Ratio?

Stock Market Price / Earnings Per Share

6

What is the formula for the Quick Ratio? (Also know as Acid Ratio.)

(Current Assets - Inventory)/Current Liabilities

7

What is the current ratio?

Current Assets/Current Liabilities

8

What is formula for the Number of Days’ Sales in Average Inventories?

(Average inventory at cost/COGS)*365

OR

365 / (Cost of Goods Sold/ Avg Inventory)

9

How is the debt to equity ratio calculated?

Debt to equity = Total liabilities /
Common stockholder’s equity

*equity is in dollars

10

How is Diluted EPS Calculated?

(Profit or loss attributable to common equity holders of parent company
+ After-tax interest on convertible debt + Convertible preferred dividends)

Divided By

(Weighted average number of common shares outstanding during the period
+ All dilutive potential common stock)

11

What is the Accounts Receivable Turnover Ratio?

Net Credit Sales / Average Accounts Receivable