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Accounting Formulas
Formulas for final
Question | Answer |
---|---|
Current Ratio | current assets/current liabilities |
Quick Ratio | current assets-inventory-prepaid/current liabilities |
Earnings per share | NI - preferred dividends/average common stock outstanding |
Return on investment | NI / total assets or NI / investment or operating income / operating assets |
Return on equity | NI / stockholders' equity |
Debt to Equity | Debt / Equity |
Liquidity | Current ratio and quick ratio |
Stock Market | Earnings per share |
Profitability | Return on investment and return on equity |
Solvency | Debt to equity ratio |
profitability index | NPV/investment |
payback period | investment/annual cash flows |
Margin | NI / sales |
Turnover | sales / investment |
Residual income | operating income - (operating assets x ROI) |
Price variance | (actual rate or price - standard rate or price) * actual units produced |
Usage variance | (actual units produced - standard units allowed) * standard rate or price |
Standard units allowed | Actual units produced * Standard rate or price |
ABC allocation rate | cost to be allocated / cost driver |
Volume allocation rate | total MO / number of units |
Predetermined MO rate | total MO / cost driver |
Breakeven in units | R(x) - VC(x) - FC(x) or Total FC/CM per unit |
CVP | Breakeven + profit |
CM ratio | CM per unit / sales price per unit |
Margin of Safety | Sales - breakeven sales |
Margin of safety % | Margin / sales |
Sales volume | FC + desired profit / CM ratio |
Magnitude of operating leverage | CM / NI |
CM | Sales - VC |
Sales price | average VC per unit + average FC per unit + desired profit per unit |