Finance Equations Flashcards
Equation for trade receivable days
Trade receivables/ credit sales x 365
Equation for liquid capital ratio
Current assets - inventory/ Current liabilities
Equation for current ratio
Current assets - Current liabilities
Equation for cost of goods sold
Opening purchases + inventory - closing inventory
Equation for gross profit
Sales revenue - cost of goods
Equation for revenue
Unit price x quantity sold
Equation for margin of safety
Actual sales - Break even output
Equation for break even output
Fixed costs/ unit contribution
Equation for total distribution (Per unit)
Selling price - variable costs
Equation for total distribution
Sales revenue - Total variable costs
Equation for profit
Total revenue - Total costs
Equation for total costs
Fixed costs + Total variable costs
Equation for total revenue
Selling price x Quantity sold
Equation for closing balance
Opening balance + Net cash flow
Equation for net cash flow
Cash inflow - Total cash outflows
Equation on return on capital employed
Profit/ capital employed x 100
Equation for Net profit margin
Profit/ revenue x 100
Equation for mark up
Gross profit/ cost of sales x 100
Equation for gross profit margin
Gross profit/ revenue x 100
Equation of balance sheets
Net assets = capital employed
Equation for capital employed
Opening capital + profit of the year
Equation of net assets
Non-current assets + net current assets - liabilities
Equation of net current assets
Current assets - current liabilities
Equation for net book value
Cost - deprication
Equation for profit/loss of the year
Gross profit - expenses + other revenue
