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PoA > PoA formula > Flashcards

PoA formula Flashcards

1
Q

accounting equation

A

assets = equity +profit/loss + liabilities

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2
Q

operating profit

A

gross profit - overheads

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3
Q

depreciation

A

(cost to purchase - residual value) / estimated useful life

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4
Q

expanded accounting equation

A

assets (end) = equity (start) + sales revenue - costs of sales + liabilities

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5
Q

COGS

A

costs of sales = opening inventories + purchases - closing inventories

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6
Q

gross profit margin

A

gross profit / sales revenue x 100

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7
Q

operating profit margin

A

operating profit / sales revenue x 100

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8
Q

capital employed

A

equity + non-current liabilities

total assets - current liabilities

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9
Q

ROCE

A

operating profit / (equity + NCL) x100

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10
Q

capital turnover

A

sales / capital

sales / (equity + non current liabilities)

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11
Q

ROSF

A

profit for the period / (share capital + reserves) x100

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12
Q

gearing ratio

A

non current liabilities / equity

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13
Q

current ratio

A

current assets / current liabilities (:1)

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14
Q

acid test ratio

A

(current assets - liabilities) /current liabilities (:1)

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15
Q

interest cover ratio

A

operating profit / interest expense

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16
Q

Earnings per share (EPS)

A

profit / number of shares

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17
Q

Price to earnings ratio (P/E ratio)

A

market price per share / EPS

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18
Q

dividend yield ratio

A

dividend per share / price per share x100

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19
Q

dividend payout ratio

A

dividends announced for the year / profit for the year x 100

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20
Q

measuring profit

A

revenue - total expenses

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21
Q

BEP

A

fixed costs / (sales revenue per unit - variable cost per unit)

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22
Q

contribution per unit

A

sales revenue per unit - variable cost per unit

23
Q

contribution margin ratio

A

contribution / sales revenue x 100

24
Q

contribution

A

sales revenue - variable costs

fixed costs + profit

25
Q

volume of activity to achieve target profit

A

total sales revenue = fixed cost + variable cost + target profit

26
Q

ROCE broken down

A

(operating profit/sales revenue) x (sales revenue/capital)

27
Q

capital

A

equity + non current liabilities

28
Q

Average settlement period for trade receivables

A

average trade receivables / credit sales revenue x 365

29
Q

average inventories turnover period

A

average inventories held / cost of sales x 365

30
Q

proportion of current assets financed from short term sources

A

current liabilities / current assets x100

31
Q

variable cost per unit (high low method)

A

[total cost (highest output) - total cost (lowest output)] / units (highest output) - units (lowest output)]

32
Q

fixed cost (HighLow)

A

(total cost HO - units HO) x variable cost per unit

33
Q

margin of safety

A

expected unit sales - break even unit sales

34
Q

dividend per share

A

EPS x dividend payout ratio

35
Q

break even sales (using % margin of safety)

A

actual sales x (1 - margin of safety/100)

36
Q

number of units sold (through BEP)

A

(fixed costs + profit) / contribution per unit

37
Q

achieving a target profit

A

total sales revenue = fixed cost + total variable cost + target profit

38
Q

break even revenues

A

break even point x selling price

39
Q

calculate operating profit/loss

A

[units sold x (selling price PU - variable cost PU)] - fixed costs

40
Q

target quantity

A

(fixed costs + target profit) / (selling price - variable cost per unit)

41
Q

overhead absorption rate

A

total overhead costs / total output

42
Q

zero based budgeting

A

start from scratch every time

43
Q

incremental budget

A

past activities

44
Q

working capital

A

current assets - current liabilities

45
Q

overhead recovery rate

A

total overhead costs / activity level

46
Q

cash receivable budget

A

cash receivable = opening balance + credit sales - closing balance

47
Q

payback period

A

cash flow for year one minus investment cost. answer carries out to next year until reach positive number

48
Q

net present value

A

cash flow x [1/(1+r)^n]

r: discounted rate (table)
n: number of periods

49
Q

internal rate of return

A

latest discount rate - (latest NPV / NPV per 1 %)

50
Q

NPV per 1%

A

difference NPV / difference discount rate

51
Q

opening cash cycle (OCC)

A

inventories turnover period + trade receivables settlement period - trade payables settlement period

52
Q

weeks OCC

A

everything - credit

everything - payables

53
Q

Margin of safety in percentage

A

(actual sales - break even sales) / actual sales x100

54
Q

BEP (not involving any division)

A

total costs = total sales revenue

PoA (2 decks)

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