Finance Equations Flashcards by Harry M | Brainscape

Q

Equation for trade receivable days

A

Trade receivables/ credit sales x 365

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Q

Equation for liquid capital ratio

A

Current assets - inventory/ Current liabilities

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Q

Equation for current ratio

A

Current assets - Current liabilities

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Q

Equation for cost of goods sold

A

Opening purchases + inventory - closing inventory

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Q

Equation for gross profit

A

Sales revenue - cost of goods

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Q

Equation for revenue

A

Unit price x quantity sold

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Q

Equation for margin of safety

A

Actual sales - Break even output

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Q

Equation for break even output

A

Fixed costs/ unit contribution

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Q

Equation for total distribution (Per unit)

A

Selling price - variable costs

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Q

Equation for total distribution

A

Sales revenue - Total variable costs

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Q

Equation for profit

A

Total revenue - Total costs

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Q

Equation for total costs

A

Fixed costs + Total variable costs

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Q

Equation for total revenue

A

Selling price x Quantity sold

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Q

Equation for closing balance

A

Opening balance + Net cash flow

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Q

Equation for net cash flow

A

Cash inflow - Total cash outflows

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Q

Equation on return on capital employed

A

Profit/ capital employed x 100

Q

Equation for Net profit margin

A

Profit/ revenue x 100

Q

Equation for mark up

A

Gross profit/ cost of sales x 100

Q

Equation for gross profit margin

A

Gross profit/ revenue x 100

Q

Equation of balance sheets

A

Net assets = capital employed

Q

Equation for capital employed

A

Opening capital + profit of the year

Q

Equation of net assets

A

Non-current assets + net current assets - liabilities

Q

Equation of net current assets

A

Current assets - current liabilities

Q

Equation for net book value

A

Cost - deprication

Q

Equation for profit/loss of the year

A

Gross profit - expenses + other revenue