Accounting
Current ratio
Current ratio: Current ratio = current assets / current liabilities at the same balance-sheet date.
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Accounting
Choose a tool. The method, example and assumptions are included.
Accounting
Quick ratio
Quick ratio: Quick ratio = (cash + marketable securities + net receivables) / current liabilities.
Accounting
Cash ratio
Cash ratio: Cash ratio = (cash equivalents + readily marketable securities) / current liabilities.
Accounting
Return on average assets
Return on average assets: ROA = net income / average of opening and closing total assets × 100.
Accounting
Return on average equity
Return on average equity: ROE = net income / average opening and closing equity × 100.
Accounting
Return on capital employed
Return on capital employed: ROCE = EBIT / (total assets − current liabilities) × 100, using the selected balance-sheet date.
Accounting
Interest coverage ratio
Interest coverage ratio: Interest coverage = EBIT / interest expense, expressed as times covered.
Accounting
DuPont three-factor ROE
DuPont three-factor ROE: DuPont ROE = net profit margin × asset turnover × equity multiplier.
Accounting
FIFO inventory issue cost
FIFO inventory issue cost: Issue units from the oldest purchase layer first; sum issued units × layer cost, retaining unissued layers in closing inventory.
Accounting
Units-of-production depreciation
Units-of-production depreciation: Period depreciation = (cost − residual value) × period output / estimated lifetime output.
Accounting
Sum-of-years-digits depreciation
Sum-of-years-digits depreciation: Depreciation for year y = (cost−residual) × (life−y+1) / [life(life+1)/2].
Accounting
Receivables aging loss allowance
Receivables aging loss allowance: Required closing allowance = Σ(bucket balance × expected loss rate).
Accounting
Margin of safety in sales
Margin of safety in sales: Margin of safety = actual sales − break-even sales; divide by actual sales for the percentage.
Accounting
Degree of operating leverage
Degree of operating leverage: Operating leverage = contribution margin / operating profit = (sales−variable costs)/(sales−variable costs−fixed costs).
Accounting
High-low fixed and variable cost
High-low fixed and variable cost: Variable cost per unit = cost difference/activity difference.
Accounting
Absorption manufacturing unit cost
Absorption manufacturing unit cost: Absorption unit cost = direct material + direct labour + variable manufacturing overhead + allocated fixed manufacturing overhead per unit.
Accounting
Predetermined overhead allocation
Predetermined overhead allocation: Overhead rate = budgeted overhead / budgeted allocation base.
Accounting
Invoice factoring advance and cost
Invoice factoring advance and cost: Initial advance = invoice × advance percentage.