Accounting Formulae Flashcards
gross profit margin
gross profit / revenue x 100
gross profit
revenue - cost of sales
profit margin
operating profit / revenue x 100
ROCE
profit before interest & tax (operating profit) / capital employed x100
operating profit / debt + equity
capital employed
total assets - current liabilities
current ratio
current assets / current liabilities
collection days ratio (receivables collection period)
(trade receivables x 365) / revenue
trade payables ratio (payables payment period)
(trade payables x 365) / COS
Inventories turnover (inventory holding)
(inventory x 365) / COS
dividend yield
(dividend per share / current share price) x 100
P/E ratio
Share prices / EPS
Dividend cover
EPS / Dividend per share
Operating cycle
Trade receivable days - Trade Payable days + Inventory days
asset turnover
revenue / capital employed
ROE
profit after tax less preference divided / equity invested in company
quick ratio
(current asset - inventory) - current liabilities
debt to equity
debt / equity
gearing
debt / debt + equity
interest coverage
profit before interest & tax / interest payable
EPS
earnings / no. of shares
dividend payout ratio
dividend for year / EPS
cash flow per share
(CFO - Preferred Dividends) / No. of common shares outstanding
cash flow to revenue
CFO / Net revenue
cash return on assets
CFO/ Total assets
cash return on equity
CFO / SHs equity
cash to income
CFO / Operating income
5 Cash flow performance ratios
- Cash flow per share
- Cash flow to revenue
- Cash return on assets
- Cash return on equity
- Cash to income
6 Cash flow coverage ratios
- Debt coverage
- Debt payment
- Dividend payment
- Interest coverage
- Investing and Financing
- Reinvestment
Debt coverage
CFO / Total debt
Debt payment
CFO / Cash paid for LT debt repayment
Dividend payment
CFO / Dividends paid
Interest coverage
(CFO + interest paid + taxes paid) / Interest paid
Investing and financing
CFO / Cash outflows for investing and financing activities
Reinvestment
CFO / Cash paid for long term assets
Free cash flow to the firm
CFO + Interest expense x (1-Tax rate) - Fixed capital investments
Free cash flow to equity
CFO - fixed capital investment + Net new borrowing (or minus net debt repayment)
materials - inventory - continual use
have to replace
RC = current mkt price
materials - inventory - no other use
take from inventory
RC = zero/sales value forgone/scrap value
materials - inventory - scarce
RC = opportunity cost of not using for alternative opportunity
materials - not in inventory - have to buy it
RC = current mkt price
labour - full capacity & hire more
RC = current market price
labour - spare capacity
RC = zero
labour - full capacity & cant hire more
RC = opportunity cost of not using labour/alternative opps
Sales volume variance
( Actual sales volume - budgeted sales volume ) x standard profit
Standard profit - contribution per unit
Sales price variance
( Standard price - actual price ) x actual volume
Materials price
( standard price - actual price) x actual quantity
Materials usage (quantity)
( Standard quantity - actual quantity ) x standard price
Labour rate
( standard rate - actual rate) x actual labour hours
Labour efficiency
( standard hours - actual hours) x standard rate
Fixed production volume
( actual production - budgeted production ) x fixed overhead absorption rate
Fixed overhead expenditure
( budgeted overhead - actual overhead)
Variable expenditure
( standard rate - actual rate) x actual hours
Variable efficiency
( standard hours - actual hours) x standard rate
