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Business - Formulas > Book 2 > Flashcards

Book 2 Flashcards

1
Q

How to calculate current assets from balance sheets

A

Inventories + receivable + cash and other cash equivalents

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2
Q

What is the balance sheet formula for working capital (net current assets)

A

Current assets - current liabilities

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3
Q

What is the formula for net assets in balance sheets

A

Non-current assets + current assets - current liabilities - non current liabilities

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4
Q

Formula for net worth in balance sheets

A

Non-current assets + working capital (net current assets) - non current liabilities

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5
Q

Formula for assets employed

A

Net current assets + non current assets

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6
Q

Formula for total equity

A

Share capital + reserves

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7
Q

Calculation for capital employed

A

Total equity + non-current liabilities

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8
Q

Calculate assets employed

A

Capital employed

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9
Q

What is the formula for assets

A

Liabilities + equity

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10
Q

Formula for operating profit

A

Gross profit - expense +/- exceptional items

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11
Q

Calculation for profit before tax

A

Operating profit + finance income - finance costs

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12
Q

Formula for profit for the year

A

Profit before tax - taxation

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13
Q

What is the formula for ROCE

RETURN OF CAPITAL EMPLOYED (%)

A

Operating profit or profit before tax
————————– total equity + non current liabilities

X100

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14
Q

How is current ration calculated?

A

Current assets:current liabilities

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15
Q

What is the formula for gearing ratio?

A

Total equity + non current liabilities

X100

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16
Q

How do you calculate payable days?

A

Costs of sales

X365

17
Q

What formula calculates receivable days

A

Revenue (annual sales)

X365

18
Q

How do you calculate inventory turnover?

A

Average inventories held

19
Q

What is the formula for the average rate of return? (ARR%)

A

Initial cost

X100

20
Q

How do you calculate payback period

A

Adding Annual returns from an investment (annual cost - net return = cumulative returns) until the cumulative return goes positive

Business - Formulas (2 decks)

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