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Managerial Accounting > Exam 1 Formulas > Flashcards

Exam 1 Formulas Flashcards

1
Q

Liquidity Ratios

A

Working Capital
Current Ratio
Quick Ratio

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2
Q

Ability to sell inventory and collect receivables

A

Inventory turnover
Accounts Receivable Turnover
Days’ Sales in receivables

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3
Q

Ability to Pay Long Term Debt Ratios

A

Debt ratio

Times Interest Earned Ratio

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4
Q

Profitability Ratios

A

Return on Sales
Return on Total Assets
Return on Equity
Earnings Per Share

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5
Q

Working Capital

A

Current Assets - Current Liabilities

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6
Q

Current Ratio

A

Current Assets / Current Liabilities

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7
Q

Quick Ratio

A

(Cash + Short Term Investments + Net Receivables) / Current Liabilities

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8
Q

Inventory Turnover

A

Cost of Goods Sold / Average Inventory

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9
Q

Accounts Receivable Turnover

A

Net Credit Sales / Average Net Accounts Receivable

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10
Q

Days’ Sales in Receivables

One Day’s Sales

A

Net Sales / 365 days

Then…

Average Accounts Receivables / One Day’s Sales

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11
Q

Debt Ratio

A

Total Liabilities / Total Assets

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12
Q

Times Interest Earned Ratio

A

Income from Operations / Interest Expense

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13
Q

Return on Sales

A

Net Income / Net Sales

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14
Q

Return on Total Assets

A

Net Income + Interest Expense / Average Total Assets

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15
Q

Return on Equity

A

(Net Income - Preferred Dividends Declared) / Average Common Stockholder’s Equity

Average Common Stockholder’s Equity = (RE + CS)

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16
Q

Earnings Per Share

A

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

17
Q

Analyzing Stock Investments

A

Price Earnings Ratio

Dividend Yield

18
Q

Price Earnings Ratio

A

Market Price per Common Share / Earnings Per Share of Common Stock

19
Q

Dividend Yield

A

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

20
Q

Prime Costs

A

Direct Materials + Direct Labor

21
Q

Conversion Costs

A

Direct Labor + Manufacturing Overhead

22
Q

Cost of Goods Sold

A

Beginning Inventory + Purchases - Ending Inventory

23
Q

Gross Profit

A

Net Sales - COGS

24
Q

Net Income

A

Gross Profit - (Selling, General, Administrative Expenses)

Managerial Accounting (1 decks)

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