CPA Far Exam

There are must-know formulas

straight-line depreciation

(cost-salvage value)/useful life

dilutive EPS

preferred dividends/shares of convertible preferred stock

basic EPS

(net income-preferred dividends)/weighted average common shares outstanding

current ratio

current assets/current liabilities

percentage of completion

cost to date/total estimated cost

current ratio

current assets/current liabilities

quick ratio

(cash and cash equivalents+short term investments+accounts receivable)/current liabilities

accounts receivable turnover

net sales/average accounts receivable, net

days’ sales in accounts receivable (uncollected)

(accounts receivable/net sales)*365

inventory turnover

cost of goods sold/average inventory

days in inventory

(average inventory/cost of goods sold)*365