ALL FORMULAS

Question 1

What is the main formula used for a balance sheet outcome?

Answer 1

Long term liabilities + shareholder funds

Question 2

What is the formula for working capital?

Answer 2

Current assets - current liabilities

Question 3

What is the formula for capital employed?

Answer 3

Total assets - current liabilities

Question 4

What is the formula for depreciation?

Answer 4

Expected lifetime

Question 5

What is the formula for current ratio?

Answer 5

Current assets / current liabilities

Question 6

What is the formula for acid ratio test?

Answer 6

current liabilities

Question 7

What is the formula for gearing?

Answer 7

Long term liabilities
—————————– x 100
Capital employed

Question 8

What is the formula for cost of sales (used on profit and loss)?

Answer 8

Opening stock - purchases + closing stock

Question 9

What is the formula for payback period?

Answer 9

Income needed / contribution per month

Question 10

What is the 3 step guide/ formula for ARR?

Answer 10

1 Identify lifetime profit
2 Divide by number of years
3 Calculate as percentage of initial outlay

Question 11

What is the formula for finding NPV per year as percentage of initial investment?

Answer 11

NPV
————————— x100
initial investment