ACCT Equations (Exam 2)

Find COGS (2)

Beg. inventory + Purchases - End. Inventory

or

Sales revenue - Gross Profit

Find COG available for sale

Beg. Inventory + COG Purchased

Find End. Inventory

Beg. inventory + Purchases - COGS

Find COG Purchased

Purchases - discounts - perchase returns and allowances + freight in

Quality of earnings Ratio

Net cash from operating / Net income

Gross Profit

Sales rev - COGS

Net income

Gross profit - operating expenses

Sales revenue

Gross profit + COGS

Gross profit rate

Gross profit / Net sales

Sales

Net sales + sales returns and allowances

Net sales

sales - Sales returns and allowances

Operating expense (2)

gross profit - income from operations

or

gross profit - Net income

Profit margin

Net income / net sales

Goods avaiable for sale/ finished goods

total inventory - raw materials - work in progress

total inventory

raw materials + work in progress + finished goods

Current assets (2)

Inventory + Supplies

or

Debt investments + notes receivable

weighted average unit cost

total cost of goods avalible for sale / total units avalible for sale

Inventory turnover

COGS / Average inventory

days in inventory

Average inventory / COGS * 365