Accoutining Formulas

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Description and Tags

This includes accounting ratios, income statements, balance sheets, manufacturing account, Trial Balance

Last updated 9:37 PM on 4/24/26
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12 Terms

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Trial Balance

Debit Side

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  • Cash

  • Bank

  • Inventory (Stock)

  • Equipment

  • Machinery

  • Motor Vehicles

  • Buildings

  • Debtors (Accounts Receivable)

  • Wages

  • Salaries

  • Rent

  • Electricity

  • Insurance

  • Advertising

  • Repairs

  • Carriage Inwards

  • Discount Allowed

  • Bad Debts

  • Drawings

  • Purchases

  • Returns Inwards (Sales Returns)

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Credit Side

  • Sales

  • Rent Received

  • Commission Received

  • Interest Received

  • Discount Received

  • Creditors

  • Loans

  • Bank Overdraft

  • Accrued Expenses

  • Capital

  • Returns Outward (Purchases Returns)

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Accounting Ratios

Profitability Ratios

Gross Profit Margin

Gross Profit/Revenue x 100%

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Net Profit Margin

Net Income/Sales x 100%

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Markup

Gross Profit/Cost Price

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ROCE

Net Profit/Capital Employed x 100%

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Liquidity Ratios

Current Ratio= Current Assets/Current Liabilities

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Acid Test/ Quick Ratio

Current Assets - Stock/Current Liabilities

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Trade Receivables Turnover Days

Trade Receivables/Credit Sales x 365 days

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Trade Payables Turnover Days

Trade Payables/ Credit Purchases x 365 days

12
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