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Year 2 Semester 2 > Accounting Formulae > Flashcards

Accounting Formulae Flashcards

1
Q

gross profit margin

A

gross profit / revenue x 100

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2
Q

gross profit

A

revenue - cost of sales

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3
Q

profit margin

A

operating profit / revenue x 100

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4
Q

ROCE

A

profit before interest & tax (operating profit) / capital employed x100

operating profit / debt + equity

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5
Q

capital employed

A

total assets - current liabilities

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6
Q

current ratio

A

current assets / current liabilities

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7
Q

collection days ratio (receivables collection period)

A

(trade receivables x 365) / revenue

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8
Q

trade payables ratio (payables payment period)

A

(trade payables x 365) / COS

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9
Q

Inventories turnover (inventory holding)

A

(inventory x 365) / COS

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10
Q

dividend yield

A

(dividend per share / current share price) x 100

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11
Q

P/E ratio

A

Share prices / EPS

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12
Q

Dividend cover

A

EPS / Dividend per share

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13
Q

Operating cycle

A

Trade receivable days - Trade Payable days + Inventory days

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14
Q

asset turnover

A

revenue / capital employed

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15
Q

ROE

A

profit after tax less preference divided / equity invested in company

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16
Q

quick ratio

A

(current asset - inventory) - current liabilities

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17
Q

debt to equity

A

debt / equity

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18
Q

gearing

A

debt / debt + equity

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19
Q

interest coverage

A

profit before interest & tax / interest payable

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20
Q

EPS

A

earnings / no. of shares

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21
Q

dividend payout ratio

A

dividend for year / EPS

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22
Q

cash flow per share

A

(CFO - Preferred Dividends) / No. of common shares outstanding

23
Q

cash flow to revenue

A

CFO / Net revenue

24
Q

cash return on assets

A

CFO/ Total assets

25
Q

cash return on equity

A

CFO / SHs equity

26
Q

cash to income

A

CFO / Operating income

27
Q

5 Cash flow performance ratios

A
  1. Cash flow per share
  2. Cash flow to revenue
  3. Cash return on assets
  4. Cash return on equity
  5. Cash to income
28
Q

6 Cash flow coverage ratios

A
  1. Debt coverage
  2. Debt payment
  3. Dividend payment
  4. Interest coverage
  5. Investing and Financing
  6. Reinvestment
29
Q

Debt coverage

A

CFO / Total debt

30
Q

Debt payment

A

CFO / Cash paid for LT debt repayment

31
Q

Dividend payment

A

CFO / Dividends paid

32
Q

Interest coverage

A

(CFO + interest paid + taxes paid) / Interest paid

33
Q

Investing and financing

A

CFO / Cash outflows for investing and financing activities

34
Q

Reinvestment

A

CFO / Cash paid for long term assets

35
Q

Free cash flow to the firm

A

CFO + Interest expense x (1-Tax rate) - Fixed capital investments

36
Q

Free cash flow to equity

A

CFO - fixed capital investment + Net new borrowing (or minus net debt repayment)

37
Q

materials - inventory - continual use

A

have to replace
RC = current mkt price

38
Q

materials - inventory - no other use

A

take from inventory
RC = zero/sales value forgone/scrap value

39
Q

materials - inventory - scarce

A

RC = opportunity cost of not using for alternative opportunity

40
Q

materials - not in inventory - have to buy it

A

RC = current mkt price

41
Q

labour - full capacity & hire more

A

RC = current market price

42
Q

labour - spare capacity

A

RC = zero

43
Q

labour - full capacity & cant hire more

A

RC = opportunity cost of not using labour/alternative opps

44
Q

Sales volume variance

A

( Actual sales volume - budgeted sales volume ) x standard profit

Standard profit - contribution per unit

45
Q

Sales price variance

A

( Standard price - actual price ) x actual volume

46
Q

Materials price

A

( standard price - actual price) x actual quantity

47
Q

Materials usage (quantity)

A

( Standard quantity - actual quantity ) x standard price

48
Q

Labour rate

A

( standard rate - actual rate) x actual labour hours

49
Q

Labour efficiency

A

( standard hours - actual hours) x standard rate

50
Q

Fixed production volume

A

( actual production - budgeted production ) x fixed overhead absorption rate

51
Q

Fixed overhead expenditure

A

( budgeted overhead - actual overhead)

52
Q

Variable expenditure

A

( standard rate - actual rate) x actual hours

53
Q

Variable efficiency

A

( standard hours - actual hours) x standard rate

Year 2 Semester 2 (16 decks)

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