Formulas Flashcards
Balance Sheet equation: ?
Assets = Liabilities + Equity
Income Statement equations:
Sales revenue - COGS = Gross Profit
Gross Profit + Revenues - Expenses = Net Income
Net sales Revenue equation:
Sales Revenue - Sales return & allowances - Sales discount
Net Realizable Value equation:
Accounts receivable - Allowance for doubtful accounts
Bad Debt Expense for Net credit sales method equation:
Net credit sales * % expected uncollectible
Aging method equation:
∑ (amount of receivables * %)
Accounts receivable turnover equation:
Net sales revenue / Average accounts receivable
Average accounts receivable equation:
(Accounts receivable at Jan 1 + accounts receivable at Dec 31) / 2
Average collection period equation:
365 / Accounts receivable turnover
Cost of goods available for sale equation:
Beginning inventory + net purchases
Cost of goods sold equation:
cost of goods available for sale - ending inventory
Net purchases equation:
Purchases - purchase returns - purchase discounts + freight in
Weighted average cost per unit equation:
Cost of beginning inventory + cost of purchases / units in beginning inventory + units purchased
Inventory turnover equation:
Cost of goods sold / average inventory
Number of days sales in inventory equation:
365 / inventory turnover
Operating cycle equation:
Number of days sale in inventory + average collection period
Gross Margin/ Profit rate equation:
gross margin(profit) / net sales revenue
Ending common stock equation:
Beginning balance + additional sales of common stock
Ending retained earnings equation:
Beginning retained earnings + Net income - Dividends
Working capital equation:
Current assets - current liabilities
Current ratio equation:
Current assets / current liabilities
Acid test ratio equation:
(Cash + accounts receivable) / current liabilities
Interest equation:
principal * rate * time
Future value equation:
Present value * future value factor
