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
future value factors equation:
(1 + i) ^n
Present value equation:
Present value = future value * present value factor
Present value factors equation:
Present value factors =
1 / [ (1+ i) ^n ]
Future value of an ordinary annuity equation:
Future value of an ordinary annuity =
payment amount * future value annuity factor
Future value of an annuity due table factor equation:
Future value of an annuity due table factor =
payment * FVAF factor * (1 + i)
Present value of an ordinary annuity equation:
Present value of an ordinary annuity =
payment * present value annuity factor i,n
Present value of annuity due table factor equation:
Present value of annuity due table factor =
payment * PVA factor * (1 + i)
Book Value equation: ?
Book value =
cost of asset - accumulated depreciation
Straight line depreciation expense per year equation: ?
Straight line depreciation expense per year =
cost - residual value / life (in years)
Sum of the years digits depreciation equation : ?
sum of the years digits depreciation =
(cost - residual value) * (life / SYD)
Double declining balance annual deprecation expense equation: ?
Double declining balance annual depreciation expense =
Book value at beg of year * (2 / life)
Units of production depreciation equation: ?
Units of production depreciation =
(cost - residual value) / total estimated usage = usage rate * actual usage for the current year
Reduction of Principle equation: ?
Reduction of Principal =
Payment - Interest
Loan balance equation ?
Loan balance =
Beginning balance - Reduction of principal
