K17BA Formulas List

Vocabulary practice flashcards covering essential accounting, finance, and investment formulas from the K17BA Formulas List.

Basic Accounting Equation

$$\text{Assets} = \text{Liabilities} + \text{Equity}$$

Gross Profit

$$\text{Gross Profit} = \text{Revenue} - \text{Cost of Goods Sold (COGS)}$$

Operating Income

$$\text{Operating Income} = \text{Gross Profit} - \text{Operating Expenses}$$

Net Profit Margin

$$\text{Net Profit Margin} = \left(\frac{\text{Net Income}}{\text{Revenue}}\right) \times 100$$

Simple Interest

$$SI = P \times R \times T$$

Compound Interest

$$A = P(1 + r)^t$$

Compound Interest with Periodic Compounding

$$A = P\left(1 + \frac{r}{n}\right)^{nt}$$

Standard Break-even Formula (Break-even Units)

$$\text{Break-even Units} = \frac{\text{Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}$$

Selling Price per Unit (Rearranged Break-even Formula)

$$\text{Selling Price per Unit} = \text{Variable Cost per Unit} + \frac{\text{Fixed Costs}}{\text{Break-even Units}}$$

Net Present Value (NPV)

$$\text{NPV} = \sum \left(\frac{C_t}{(1 + r)^t}\right) - C_0$$

Real Value (in today's £)

$$\text{Real Value (in today's £)} = \frac{\text{Future Value}}{(1 + \text{Inflation Rate})^t}$$

Return on Equity (ROE)

$$\text{ROE} = \left(\frac{\text{Net Income}}{\text{Shareholders' Equity}}\right) \times 100$$

Current Ratio

$$\text{Current Ratio} = \frac{\text{Current Assets}}{\text{Current Liabilities}}$$

Quick Ratio

$$\text{Quick Ratio} = \frac{\text{Current Assets} - \text{Inventory}}{\text{Current Liabilities}}$$