Formulas Flashcards
Total equity
Total assets - total liabilities
Formula for gross profit margin
Gross profit/sales revenue
Rate of depreciation
Ann. dep charge/asset cost
Elasticity of demand (price or income)
% change in quantity demanded/% change in variable
Money multiplier
1/Reserve ratio
Accounting equation
Assets = capital + liabilities
Gross profit
Sales - cost of sales
Net profit
Gross profits - expenses
Depreciation expense (Straight line method)
Cost - estimated residual value/useful economic life
Net book value
Cost of an asset - accumulated depreciation
Depreciation expenses (Reducing balance method; given a percent)
% of NBV of asset at start of each year
Total provision of doubtful doubts IN A FOLLOWING YEAR
Current year’s provision of doubtful doubts - last year’s provision of doubtful doubts (BECAUSE THERE WAS PROVISION ALREADY A YEAR BEFORE!)
