Equations

Straight-line method

(cost - Residual Value) / Useful Life

Double-Declining balance Method

(Cost - Accumulated Depreciation) x 2/useful life

Gross Profit

Revenue - Cost of Good sold

Operating Income

Gross profit - Selling, general, and administrative expenses

Income before Taxes

Operating Income - Expenses

Net Income

Income before Taxes - Income tax expense

Weighted-Average Cost

Total cost / # of units

Annuity

Interest Expense x Table 4

Lump Sum

Face Amount x Table 2

Issue price

Annuity + Lumpsum

Interest Expense

Face Amount x Bond Rate x 1/2

Premium

Bond rate > Market Rate

Discount

Bond rate < Market

loss

Market Value > Carrying Value

Gain

Market Value < Carrying Value

Interest Expense

((Interest Expense - Discount/Premium) + Issue Price) x Market Rate x 1/2

Operating Activities

Cash receipts and cash payments for transactions relating to revenue and expense activities

Investing Activities

Cash Transactions involving the purchase and sale of long-term assets and current investments

Financing Activties

Inflows and outflows of cash resulting from the external financing of a business

Op Cash inflow

• Sale of goods or services

• collection of interest and dividends

Op cash outflow

• For inventory

• For operating expenses

• For interest

• For Income Taxes

Investing Cash inflows

• Sale of investments

• sale of long-term assets

• collection of notes receivable

Investing cash outflow

• Purchase of investments

• Purchase of long-term assets

• Purchase of investments

• Lending with notes receivable

Financing cash inflow

• Issuance of stocks

• Issuance of bonds

• Obtaining loans

Financing cash inflow

• Issuance of bonds or notes payable

• Issuance of stock

Financing Cash outflows

• Repayment of loans

• Purchase of treasury stock

• Payment of dividends

Debit to Equity ratio

Total liabilities / Stockholders equity

Receivables Turnover ratio

Net Credit Sales / Average Accounts Receivable

Inventory Turnover Ratio

Cost of Goods Sold / Average Inventory

Price to equity ratio

Share price / Earnings per share

Return of Asset (ROA)

Net Income / Average Total Assets

Return of Equity (ROE)

Net Income / Average Shareholder's Equity

Current Ratio

Current Assets / Current Liabilities