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First Year Accounting > Accounting Formulas > Flashcards

Accounting Formulas Flashcards

1
Q

Gross Profit/Gross Margin

A

Sales Revenue - COGS

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2
Q

Discounts on Bonds Payable

A

Face Value - Issue Price

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3
Q

Carrying Value

A

Face Value - Discount on BP

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4
Q

Interest Expense on Bonds

A

Carrying Value x Market Rate

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5
Q

Interest Payment

A

Face Value x Coupon Rate

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6
Q

Working Capital

A

Current Assets - Current Liabilities

Measures ability to pay current liabilities

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7
Q

Current Ratio

A

Current Assets/Current Liabilities

Measures ability to pay current liabilities

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8
Q

Quick Ratio

A

(Cash + Short-term Investments + Net Current Receivables)/Current Liabilities

Measures ability to pay current liabilities

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9
Q

Inventory Turnover

A

COGS/Average Inventory

Measures turnover and cash conversion

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10
Q

Accounts Receivable Turnover

A

Net Sales/Average Net AR

Measures turnover and cash conversion

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11
Q

Accounts Payable Turnover

A

COGS/Average AP

Measures turnover and cash conversion

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12
Q

Debt Ratio

A

Total Liabilities/Total Assets

Measures leverage

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13
Q

Times-Interest-Earned

A

Income from Operations/Interest Expense

Measures leverage

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14
Q

Gross Profit %

A

Gross Profit/Net Sales

Measures profitability

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15
Q

Operating Income %

A

Operating Income/Net Sales

Measures profitability

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16
Q

Return on Sales (Net Profit Margin)

A

Net Income/Net Sales

Measures profitability

17
Q

Asset Turnover

A

Net Sales/Average Total Assets

Measures profitability

18
Q

Return on Assets

A

(Net Income + Interest Expense)/Average Total Assets

Measures profitability

19
Q

Return on Common Shareholders’ Equity

A

(Net Income - Preferred Dividends)/Average Common Shareholders’ Equity

Measures profitability

20
Q

Earning per Share

A

(Net Income - Preferred Dividends)/Average # of Outstanding Common Shares

Measures profitability

21
Q

Price/Earnings Ratio

A

Market Price per Share?Earnings per Share

Analyzing Stock as an Investment

22
Q

Dividend Yield

A

Dividends per Share of Common Stock/Market Price per Share of Common Stock

Analyzing Stock as an Investment

23
Q

Book Value/Share of Common Stock

A

(Total Equity - Preferred Equity)/Weighted Average # of Common Shares Outstanding

First Year Accounting (3 decks)

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