ACCT 1220 – Final Exam Formula Sheet

Dollar amount of changes

Percentage Change=
Base− year amount

Any− year $
Trend %=
Base− year $

Each Income statement item

Vertical Analysis %=
Sales

Working capital=Current Assets−Current Liabilitie s

Current Assets
Current Ratio=
Current Liabilities

Cash∧cash equivalents+ Short term investments+net current receivables

Quick Ratio=
Current Liabilities

Cost of goods sold

Inventory Turnover=
Average inventory

365
Days inventory outstanding(DIO )=
Turnover

Net sales
Accountsreceivable turnover=
Average net accounts receivable

365
Days sales outstanding(DSO)=
Turnover

Cost of goods sold

Accounts payable turnover=
Average accounts payable

365
Days payable outstanding(DPO)=
Turnover

Cash conversion cycle=DIO + DSO−DP O

Total Liabilities
Debt Ratio=
Total Assets

¿ interest earned ratio=Income ¿ operations ¿

Interest expense

Gross profit
Gross profit %=
Net Sales
 Operating Income
Operating Profit %=
Net Sales

Net Income
Returnon Sales(Net profit margin)=
Net Sales

Net Sales
Asset Turnover=
Average Total assets

Net income+ Interest Expense

Returnon Total Assets (ROA)=
Averagetotal assets

Average total assets

Leverage Ratio= '
Average common shareholders equity

' Net income−Preferred dividends

Returnon Common Shareholder s Equity(ROE )= '
Average common shareholders equity

Net income− preferred dividends

Earnings per share of common stock=
Average number of common shares outstanding

Market price per sahre of common stock

Price Earnings Ratio=
Earnings per share

Dividend per common share

Dividend Yield on common stock=
Market price per common share
'
Total shareholders equity−Preferred equity
Book value per common share=
Weighted average number of common shares outstanding