Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AC105 - Financial Accounting > Formulas > Flashcards

Formulas Flashcards

1
Q

What is the formula for straight line depreciation?

A

(Initial cost - Residual value) ÷ estimated useful life of an asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the formula for reducing balance depreciation?

A

Depreciation rate x NBV at start of the year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is the formula for Cost of Sales?

A

Starting inventory + purchases - closing inventory = COS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is the formula for a balance sheet?

A

Assets = Liabilities + Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is the formula for Net Income?

A

Net income = Income - Expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the formula for Gain/Loss on Disposal?

A

Gain/loss on disposal = Disposal proceeds - NBV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the formula for end retained earnings?

A

RE (end) = RE (beg) + Net profit (IS) - Dividends paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the formula for taxable profit?

A

Taxable profit = Profit before tax + (Non-deductible expense) - (Non-taxable income) - Capital allowances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How to calculate income tax for the year?

A

Taxable profit x corporate tax rate (%)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

How to calculate current year’s tax expense?

A

Current year’s tax expense = Current year’s tax estimate +/- Prior year under/(over) provision

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How to calculate interest paid (cash outflow)?

A

Interest paid (cash outflow) = Opening interest liability (interest payable, SOFP) + Income statement charge (i.e. interest expense) - Closing interest liability (interest payable, SOFP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How to calculate tax paid ( cash outflow)?

A

Tax paid (cash outflow) = Opening tax liability (tax payable, SOFP) + Income Statement charge (i.e. tax expense) - Closing tax liability (interest payable, SOFP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How to calculate Return On Capital Employed (ROCE)?

A

Profit before interest and tax ÷ Average capital employed (which is calculated by share capital + reserves + non-current liabilities OR total assets - current liabilities) x 100%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How to calculate Return On Equity (ROE)?

A

Profit for the year
(less any preference dividend) ÷ (Ordinary share capital + Reserves)
x
100%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How to calculate gross profit margin?

A

(Gross profit ÷ Sales revenue) x 100%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How to calculate operating profit margin?

A

Operating profit margin = (Sales ÷ revenue) x 100%

17
Q

How to calculate mark up?

A

Mark-up = Gross profit ÷ COS

18
Q

How to calculate margin?

A

Margin = Gross profit ÷ Sales

19
Q

How to calculate inventory days?

A

Inventory days = (Average inventories held ÷ COS) x 365

20
Q

How to calculate receivable days?

A

Receivable days = (Average trade receivables ÷ credit sales) x 365

21
Q

How to calculate payable days?

A

Payable days = (Average trade payables ÷ Credit purchases(when purchases are not known, COS is used)) X 365

22
Q

How to calculate net asset turnover ratio?

A

Net asset turnover ratio = Sales revenue ÷ average capital employed (Share capital + Reserves + Non-current liabilities OR Total assets − Current liabilities)

23
Q

How to calculate current ratio?

A

Current assets ÷ current liabilities

24
Q

How to calculate acid test ratio?

A

Acid test ratio = (Current assets - Inventory) ÷ Current liabilities

25
Q

How to calculate the gearing ratio

A

Gearing ratio = Non-current liabilities ÷ (Share capital + reserves + non-current liabilities)

26
Q

How to calculate the debt-to-equity ratio?

A

Debt-to-equity = Total liabilities ÷ Total equity

27
Q

How to calculate the interest cover ratio?

A

Interest cover ratio = Operating profit ÷ Interest expense

28
Q

How to calculate dividend payout ratio?

A

Dividend payout ratio = (Dividend announced for the year ÷ profit after tax less any preference dividends) X 100%

29
Q

How to calculate dividend cover ratio?

A

Dividend cover ratio = Earnings for the year available for dividend ÷ dividends announced for the year

30
Q

How to calculate dividend yield?

A

Dividend yield = (Dividend per share ÷ Market value per share) X 100%

31
Q

How to calculate earnings per share (EPS)?

A

(Profit (after tax) less preference dividend ÷ Number of ordinary shares in issue) X 100

32
Q

How to calculate Price/Earnings ratio?

A

P/E ratio = (Market value per share/ Earnings per share) X 100%

33
Q

How to calculate goodwill at acquisition?

A

Goodwill at acquisition = Cost of investment – Parent’s share of acquired net assets [at FV]

34
Q

How to calculate goodwill at reporting date?

A

Goodwill at reporting date
= Goodwill at acquisition date – Accumulated impairment losses.

35
Q

How to calculate Non Controlling Interest?

A

NCI = NCI% X Net assets of S at the balance sheet date

36
Q

How to calculate Goodwill in the presence of NCI?

A

Goodwill = Purchase price – % of shares owned * fair value of S’s net assets

37
Q

How to calculate PURP using mark and and margin?

A

Unsold inventory = unsold inventory X (mark up ÷ (100 + mark up))

Unsold inventory = (margin ÷ 100)

38
Q

How to convert between mark up and margin?

A

Markup = Margin ÷ (1 - margin)

Margin = Markup / (1 + markup)

AC105 - Financial Accounting (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions