FORMULAS

Current ratio = Current assets/Current liabilities

Price-Earnings Ratio  = Market price per Share Price/ Basic Earnings per Share
Return on Common Shareholders' Equity = Net Income - Preferred Dividends/ Average Common Shareholder's Equity
Return on Assets= Net Income/ Average Total Assets
Dividend yield = Dividends declared per share/ Market Price per Share
Basic earnings per share = Income available to common shareholders/Weighted average number of common shares
Current liabilities = Accounts payable + Salaries payable + Unearned revenue.
Shareholders’ equity = Common shares + Retained earnings.
Total assets = Cash + Held for trading investments + Accounts receivable + Inventory + Prepaid rent + Supplies +
Equipment – Accumulated depreciation + Intangible assets.
Total liabilities = Accounts payable + Salaries payable + Unearned revenue + Long-term notes payable.
Contribution margin per unit = unit selling price - unit variable cost
Contribution margin ratio = Contribution margin per unit /unit selling price
Break-even point in Units = fixed Cost/ Contribution margin per unit
Break-even point in Dollars = fixed Cost/ Contribution margin ratio
Required Sales in Units = Fixed Cost + Target Operating Income / Contribution margin per unit
Required Sales in Dollars = Fixed Cost + Target Operating Income / Contribution margin Ratio
Margin of Safety in Dollars = Actual Sales – Break Even Sales
Margin of Safety Ratio = Margin of Safety in Dollars / Actual Sales
Activity-Based Overhead Rate=Estimated Overhead Per Activity - Based = Estimated Use of Cost Drivers Per Activity
Predetermined overhead rate= Estimated annual manufacturing overhead costs/ Estimated annual machine hours
Amount of overhead for year =
Over Head assigned to each product = (Estimated overhead to activity /expected use of cost drivers) x number of
inspections