Monday, 1 June 2015

Accounting Equations
Subject
1. Assets = Liability + Share Capital
2. Assets = Liability + (Share Capital + Retained Profit)
3. Assets = Liability + {Share Capital +(Retained Profit at the beginning period +
Revenue - Expenses -Dividends)}
4. Working Capital = CA - CL
5. Opening retained profits + Net profit for the period - Distributions (Dividends
declared) = Closing retained profits
6. Perpetual Method: Beginning inventory cost + Inventory acquired during the period Cost of inventory sold = Ending inventory cost
7. Periodic Method: Beginning inventory + Purchases - Ending inventory = Inventory
Sold (COGS)
8. Total cost = Ending Inventory + COGS
9. Depreciable amount = Asset Cost - Residual value
10. Straight-line depreciation: Depreciation expenses = (Cost - Residual value)/ Useful
life
11. Reducing Balance Depreciation: Depreciation expenses = Carrying Amount *
Depreciation value
12. Units of Production Depreciation: Depreciation per unit = (Cost - Residual value)/
Estimated total # of units of prod over life
13. Return on Assets (ROA) = Operating Profit After Tax/ Total assets
14. Return on Equity (ROE) = Operating Profit After Tax/ Shareholders Equity
15. Profit Margin = Operating Profit After Tax/ Sales Revenue
16. Gross Margin = Gross Profit/ Sales Revenue
17. Earning Per Share = (Net operating profit - Dividends on preferred shares)/ Weighted
average number of ordinary share outstanding
18. Assets Turnover = Sales/ Total Assets
19. Inventory Turnover = COGS/Average Inventory

Monday, 1 June 2015

20. Debits Turnover = Credit Sales/ Average Accounts Receivable
21. ROA = Profit Margin * Asset Turnover
22. Current Ratio = CA/CL
23. Quick Ratio = (Cash + Accounts Receivable + Short-term investment)/ Current
Liabilities
24. Leverage Ratio = Total assets/ Shareholders Equity
25. ROE = ROA * Leverage Ratio
26. Debt-to-Equity Ratio = Total Liabilities/ Total Shareholders Equity
27. Debt-to-Assets Ratio = Total Liabilities/ Total Assets
28. Contribution Margin (CM) = Revenue - Variable Cost
29. Contribution Margin per unit = Unit selling price - Unit variable cost
30. Contribution Margin Ratio = CM per unit/ Unit selling price
31. Break-Even Analysis - Unit-sold Approach
Profit(BT) = (S - V)X - F => X = [F + Profit(BT)]/ (S - V)

- S = unit selling price

- X = number of units
- V = unit variable cost
- F = fixed cost
32. Profit(AT) = Profit(BT) * (1 - ) => Profit(BT) = Profit(AT)/ (1-)

- = tax rate
33. Break-Even Analysis - Sales Revenue Approach
Profit(BT) = R - F - (vr)R
Sales dollar = [F+Profit(BT)]/ CM Ratio

- R = SX
- vr = V/S