A-100 Formula Sheet

Income Statement Equation

Revenues - Expenses = Net Income.

Gross Profit

Sales - Cost of Goods Sold.

Net Income from Operations

Gross Profit - Operating Expenses.

Statement of Retained Earnings

Beginning Retained Earnings + Net Income - Dividends Paid = Ending Retained Earnings.

Balance Sheet Equation

Total Assets = Total Liabilities + Total Stockholders’ Equity.

Total Stockholders’ Equity

Common Stock and Retained Earnings (Ending Balance).

Cash Flow Statement Purpose

To show the cash inflows and outflows of a business.

Ending Cash Balance

Beginning Cash Balance + Net Cash Flows from Operating Activities + Investing Activities + Financing Activities.

Taxable Income (T.I.)

Gross Income - Deductions.

Regular Income Tax Liability

Taxable Income x Flat Tax Rate of 21%.

Total Tax Liability

Regular Income Tax Liability - Credits and Prepayments.

Return on Equity

Net Income / Average Stockholders’ Equity.

Average Stockholders’ Equity

(This Year + Last Year) / 2.

Debt to Equity Ratio

Total Liabilities / Total Stockholders’ Equity.

Current Ratio

Current Assets / Current Liabilities.

Inventory Turnover Ratio

Cost of Goods Sold / Average Inventory.

Earnings Per Share Ratio

Net Income / Number of Shares Outstanding.