UIowa - Financial Accounting Final Exam Formulas

Net Income

Revenue - Expenses =

Assets

Liabilities + Stockholder's Equity =

Ending Retained Earnings

Beginning Retained Earnings + Net Income - Dividends

Operating Sales

[Net Sales (Operating Revenues)] - [Operating Expenses (Including Cost of Goods Sold)] =

Earnings Per Share

(Net Income) / (Weighted Average # of Shares of Outstanding Stock)

Net Profit Margin

Net Income / Net Sales (or Operating Revenues) =

Total Asset Turnover Ratio

Net Sales (or Operating Revenues) / Average Total Assets =

Depreciation Expense Per Year

(Cost - Residual Value) / Useful Life

Gross Profit Margin

Net Sales - Cost of Goods Sold

Operating Income

Gross Profit - Operating Expenses

Return on Assets

Net Income / Average Total Assets =

Average Total Assets

(Beginning Total Assets + Ending Total Assets) / 2 =

Income Before Taxes (Pretax Earnings)

(Income from Operations) +/- (Non-Operating Items)

DuPont Analysis

[Return on Assets (Net Income / Avg. Total Assets)] = [Net Profit Margin (Net Income / Net Sales)] x [Total Asset Turnover (Net Sales / Avg. Total Assets)]

Interest Rate

Amount Saved / Amount Paid

Net Sales

Sales Revenue - (Credit Card Discounts + Sales Discounts + Sales, Returns, & Allowances) =

Receivables Turnover Ratio

Net Sales / Average Net Accounts Receivable

Average Collection Period

365 / Accounts Receivable Turnover =

Ending Cash Balance

Net Change in Cash + Beginning Cash Balance =

Gross Profit Percentage

Gross Profit / Net Sales

Cost of Goods Sold Equation

Beginning Inventory

+ Purchases

= Goods Available for Sale

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- Ending Inventory

Ending Inventory Equation

Cost of Goods Available for Sale (#) /

Cost of Goods Available for Sale (Units)

(Market Value) Common Stock

# of Shares x Par Value

(Market Value) Additional Paid in Capital

(Market Value per Share - Par Value) x # of Shares

(Market Value) Equipment

# of Shares x Market Value

Straight Line Depreciation

Cost - Residual Value

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Useful Life

Declining Balance Method (Depreciation)

(Cost - Accumulated Depreciation) x (Multiple / Useful Life)

Units of Production Method (Depreciation)

[(Cost - Residual Value) / Estimated Production] x Actual Production =

Depletion Method (Depreciation)

(Cost - Residual Value) / Estimated Production =

Issue Price

PVA of Interest Payment + PV of Principal

PVA of Interest Payment

Principal x Coupon Rate x PVA (Using Market Rate) =

PV of Principal

Principal x PV Factor (Using Market Rate) =

Book Value of Bond

Bond Payable - Discount =

- or -

Bond Payable + Premium =

Basic Earnings Per Share

(Net Income - Preferred Dividends Declared)

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Weighted Average (Common Shares Outstanding)

Shares Outstanding

Shares Issued - Shares in Treasury

Unremitted Earnings of Equity Investees

Share of Net Income - Share of Dividends

Free Cash Flow

Cash Flow from Operating Activities

- Dividends

- Capital Expenditures

=

Capital Acquisition Ratio

Cash Flow from Operating Activities/

Cash Paid for Property, Plant, & Equipment

Quality of Income Ratio

Cash Flows from Operating Activities

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Net Income

Dividend Yield Ratio

Dividends Per Share

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Market Price Per Share