Formulas Flashcards
(35 cards)
The Accounting Equation
A=L+E
Profit
Revenue - Expenses
Annual Depreciation expense
(cost of asset - expected residual value)/Assets expected useful life
Net realizable value (NRV)
accounts receivable - provision for doubtful debt
Cost of sales (COS)
inventory at beginning +purchases - inventory at the end of period
Gross Profit
revenue - all other expenses
Purchases
payments - opening balance +closing balance
What is the Gross profit margin formula and what ratio does it measure ?
= GP/ sales x100
- Profitability
What is the Operating expense margin formula and what ratio does it measure ?
= operating expenses excluding interest / sales
- profitability
What is the ROA formula and what ratio does it measure ?
= PBIT/Average total assets
- profitability
What is the ROE formula and what ratio does it measure ?
= NPAIT/ average shareholders equity
- profitability
What is the Asset turnover formula and what ratio does it measure ?
= sales/ average total assets
- efficiency
What is the Asset turnover period formula and what ratio does it measure ?
= average total assets/ sales x 365
- efficiency
What is the inventory turnover period formula and what ratio does it measure ?
= average inventory/ COS x 365
- efficiency
What is the current ratio and what classification does it measure ?
= current assets/current liabilities
- liquidity
What is the Quick acid ratio (Acid test) formula and what ratio does it measure ?
= current assets - (Inventories + prepayments) / current liabilities
- liquidity
What is the Operating cash flows formula and what ratio does it measure ?
= operating cash flow/average current liabilities
- liquidity
What is the Gearing ratio formula?
non-current liabilities/ total equity +non-current liabilities x 100
what is the debt to asset ratio ?
total liabilities / total assets x 100
what is the indirect cost rate formula ?
indirect cost to be allocated/ total cost driver usage
what is the full cost formula ?
direct costs + allocated indirect costs
Break-even in units?
fixed costs/ contribution margin $PU
Break-even in sales dollars?
Fixed costs/ Contribution ratio
Contribution Margin $PU ?
Selling price - variable costs $PU
