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Unformatted text preview: Formulas to Know! Chapter 1
Assets = Liabilities + Stockholders' Equity Chapter 2
Free Cash Flow = Cash Provided by Operations Capital Expenditures Cash Dividends Profitability Ratios: measures of the income or operating success of a company for a given period of time Earnings per Share (EPS) = Net Income Preferred Stock Dividends Average Common Shares Outstanding Liquidity Ratios: measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash Working Capital = Current Ratio = Current Assets Current Liabilities __Current Assets__ Current Liabilities Solvency Ratios: measures of the ability of the company to survive over a long period of time Debt to Total Assets Ratio = Total Liabilities Total Assets Chapter 4
Interest = Face Value Of Note x Annual Interest Rate x Time (in terms of one year) Chapter 5
Gross Profit = Gross Profit Rate = Profit margin ratio = Sales Cost of Goods Sold Gross Profit Net Sales Net Income Net Sales Note: you do NOT need to know how to calculate depreciation for the exam Beginning inventory Add: Cost of Goods Purchased Purchases Less:Purchase Returns & Allowances Purchase Discounts____________ Net Purchases Add: Freight-in____________________ Cost of Goods Available for Sale - Ending inventory_________________ Cost of Goods Sold (under a periodic system) Sales Revenues Sales Returns & Allowances Sales Discounts___________ Net Sales Sales Revenue - Cost of Goods Sold________________ Gross Profit - Operating Expenses________________ Net Income (or Income from Operations) ...
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