Ebs Mba Ac Formulas

Front 1

Current Ratio

Back 1

Current Assets/Current Liabilities

>2

Liquidity Ratio

Front 2

Quick Ratio (or Acid Test)

Back 2

(Current Assets - Inventory)/Current Liabilities

>1

Liquidity Ratio

Front 3

Gross Profit Margin

Back 3

Gross Profit/Sales

Profitability Ratio

Front 4

Profit Margin

Back 4

Profit Before Interest and Taxes/Sales

Profitability Ratio

Front 5

Return on Total Assets

Back 5

Profit Before Interest and Taxes/Total Assets

Profitability Ratio

Front 6

Return on Inventory

Back 6

Profit Before Interest and Taxes/Inventory

Profitability Ratio

Front 7

Return on Capital Employed

Back 7

Profit Before Interest and Taxes/Capital Employed (Capital employed = Working Capital (Current Assets – Current Liabilities) + Fixed Assets)

Profitability Ratio

Front 8

Return on Owner’s Equity

Back 8

Profit Attributable to Shareholders (= Profit After Interest and Taxation)/Owner's Equity

Profitability Ratio

Front 9

Fixed (Non-Current) to Current Asset Ratio

Back 9

Fixed (Non-Current) Assets/Current Assets

Capital Structure Ratio

Front 10

Debt Ratio (Gearing)

Back 10

Total Debt/Total Assets

Capital Structure Ratio

Front 11

Debt to Equity Ratio

Back 11

Total Debt/Total Equity

Capital Structure Ratio

Front 12

Times Interest Earned

Back 12

Profit Before Financial Result (= Profit from Operations = Profit Before Interest and Taxes)/Interest Charges

Capital Structure Ratio

Front 13

Inventory Turnover

Back 13

Cost of Sales/Inventory

Efficiency Ratio

Front 14

Average Collection Period

Back 14

Debtors/Sales per Day

Efficiency Ratio

Front 15

Fixed Asset Turnover

Back 15

Sales/Fixed Assets

Efficiency Ratio

Front 16

Earnings per Share (EPS)

Back 16

Net Profit for the Financial Year (= Profit After Interest and Taxation)/Number of Ordinary Shares in Issue

Basic Stock Market Ratio

Front 17

Price/Earnings Ratio (PE Ratio)

Back 17

Market Price/EPS

Basic Stock Market Ratio

Front 18

Dividend Yield

Back 18

Dividend per Share/Market Price per Share

Basic Stock Market Ratio

Front 19

Dividend Cover

Back 19

Net Profit of the Year (= Profit After Interest and Taxation)/Dividend Payout

Basic Stock Market Ratio

Front 20

Straight-Line Depreciation

Back 20

(Original acquisition cost - estimated residual value)/Asset’s service life = Annual charge

Front 21

Consumption Method

Back 21

(Annual running hours/Total number of running hours) × Net cost = Annual Charge

Front 22

Reducing Balance Depreciation

Back 22

Under this method the depreciation charge will be higher in the earlier years of the life of the asset.

Front 23

Valuation of Closing Work-in-Progress and Inventories

Back 23

Beginning inventory + Purchases − Ending inventory
= Cost of goods sold charged in P/L Account

Front 24

Return on Equity (RE)

Back 24

Net Income (= Profit After Interest and Taxation)/Shareholder's Equity

Front 25

Return on Investment (ROI)

Back 25

(Gain from investment – Cost of investment)/Cost of investment

Front 26

Equation Method to Calculate Break-Even Point

Back 26

Break-even sales = Fixed costs + Variable costs = $$

Front 27

Contribution Margin Method to Calculate Break-Even Point

Back 27

Step 1: Contribution margin = Sales price per unit − Variable costs per unit (contribution being towards fixed costs)

Step 2: BEP = Fixed costs/Contribution margin = x (units)

Front 28

Contribution Margin Ratio Method to Calculate Break-Even Point

Back 28

Step 1: Contribution margin = Sales price per unit − Variable costs per unit (contribution being towards fixed costs)
Step 2: Contribution margin/Sales price per unit
Step 3 BEP = Fixed costs/Contribution margin ratio = $$

Front 29

Calculate Sales Required for Defined Target Profit

Back 29

(Fixed costs + Target profit)/Contribution margin

Front 30

Predetermined Overhead Allocation Rate

Back 30

Budgeted overhead for accounting period/Budgeted production units

Front 31

Material Efficiency Variance

Back 31

(Standard quantity − Actual quantity) x (Standard price per unit) = $$

Front 32

Material Price Variance

Back 32

(Standard price per unit − Actual price per unit) x (Actual quantity used) = $$

Front 33

Labour Efficiency Variance

Back 33

(Standard time allowed − Actual time taken) × (Standard rate per hour) = $$

Front 34

Labour Rate Variance

Back 34

(Standard rate per hour − Actual rate per hour) × (Actual time taken) = $$

Front 35

Variable Overhead Efficiency Variance

Back 35

(Standard cost of budgeted time for units produced) – (Standard cost of actual time taken for units produced) = $$

Front 36

Variable Overhead Spending Variance

Back 36

(Standard cost of time taken) – (Actual costs incurred) = $$

Front 37

Fixed Overhead Spending Variance

Back 37

(Budgeted fixed overhead) – (Actual fixed overheads) = $$

Front 38

Fixed Overhead Denominator Variance

Back 38

(Budgeted fixed overhead) – (Overhead applied to units produced) = $$

Front 39

Sales Contribution Variance

Back 39

(Actual contribution margin per unit – Budgeted contribution margin per unit) × Actual sales in units = $$

Front 40

Sales Volume Variance

Back 40

(Actual sales in units – Budgeted sales in units) × Budgeted contribution margin per unit = $$

Front 41

Sales Quantity Variance

Back 41

(Actual sales in units – Budgeted sales in units) × Budgeted weighted average contribution margin per unit = $$

Front 42

Sales Mix Variance

Back 42

(Actual sales in units – Budgeted sales in units) × (Budgeted contribution margin per unit – Budgeted weighted average contribution margin per unit) = $$

Front 43

Net Present Value

Back 43

x/(1 + i) n

Front 44

Net Future Value

Back 44

x(1 + i)n

Front 45

Throughput Accounting Ratio

Back 45

Return per factory hour = Sales price − Material cost/Time spent at the bottleneck per product
Cost per factory hour = Total factory cost/Total time available at bottleneck

These two numbers are then combined to give a throughput accounting ratio:
Return per factory hour/Cost per factory hour

A TA ratio under one means that the company is losing money on the product.