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BEC Formulas > Formulas > Flashcards

Formulas Flashcards

1
Q

APR (annual percentage return)

A

Effective Interest Rate * # of periods in year

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2
Q

Asset turnover

A

Sales / Total Assets

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3
Q

Breakeven Point in terms of units

A

fixed costs / Contribution Margin

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4
Q

Breakeven Point in terms of dollars

A

fixed costs / contribution margin ratio

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5
Q

Cash conversion cycle

A

inventory conversion period + receivables collection period – payables deferrable period

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6
Q

Current ratio

A

current assets / current liabilities

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7
Q

Contribution Margin

A

revenue – variable costs or sales -variable costs

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8
Q

Cost of Goods Sold

A

Beg. Inventory + Inv. Purchases – End. Inventory

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9
Q

Dividend Payout Ratio

A

cash dividend per share / Earnings per share

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10
Q

Economic Value Added

A

Average Inventory / Cost of sales per day

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11
Q

Average inventory

A

(Beginning inventory + Ending inventory) / 2

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12
Q

Inventory Turnover

A

cost of goods sold / average inventory

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13
Q

Marginal propensity to consume

A

change in spending / change in disposable income

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14
Q

Marginal propensity to save

A

change in savings / change in income

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15
Q

Number of Days Sales in Inventory

A

of days in year (usually 365 or 360) / Inventory Turnover

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16
Q

Quick Ratio

A

Quick assets (cash, marketable securities, and A/R) / current liabilities

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17
Q

Residual Income (RI)

A

operating profit – interest on investment (or required rate of return)

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18
Q

Times interest Earned Ratio

A

earnings before interest and taxes / interest expense

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19
Q

Total costs

A

fixed costs + variable costs or y = mx + b, where m = slope, x = variable value, and b = y intercept

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20
Q

Labor Efficiency Variance

A

SR * (SH – AH). Actual Quantity Purchased/Consumed *(standard price per unit – actual price per unit)

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21
Q

Labor Rate Variance

A

AH * (SR – AR). Standard price per unit * (standard quantity used – actual quantity used)

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22
Q

Material Price Variance

A

AQ * (SP – AP). Actual Quantity Purchased/Consumed *(standard price per unit – actual price per unit)

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23
Q

Material Efficiency Variance

A

SP * (SQ – AQ). Standard price per unit * (standard quantity used – actual quantity used)

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24
Q

Fixed overhead spending

A

(budgeted-standard fixed overhead to incur – actual fixed overhead incurred)

25
Q

Fixed overhead volume

A

(budgeted-standard fixed overhead to incur – ((actual production * standard labor hours)*(budgeted-standard fixed overhead to incur/budgeted labor hours))

26
Q

Weighted Average Cost of Capital

A

[(cost of capital A / Total Amount)(rate of cost)(1-Tax Rate)] + [(cost of capital B / Total cost amount)(rate of cost)]

27
Q

Work in process

A

Direct Material used + Direct Labor + Manufacturing Overhead

28
Q

Average accounts receivable

A

(Beg. A/R + End. A/R) / 2

29
Q

Average accounts receivable collection period

A

sales on credit / average accounts receivable

30
Q

Average total assets

A

(Beginning total assets + Ending total assets) / 2

31
Q

Book value per share

A

common stock equity / common stock shares outstanding

32
Q

Common stockholders’ equity

A

stockholders’ equity – preferred stock liquidation value

33
Q

Contribution Margin Ratio

A

(sales – variable costs) / sales

34
Q

Cost of financing

A

(Total assets – current liabilities) * Weighted average cost of capital

35
Q

Cross-Elasticity

A

% change in demand for certain product A / % change in price of certain product B.

36
Q

Debt to equity

A

Total debt / total equity

37
Q

Debt to total assets

A

total liabilities / total assets

38
Q

Discounted Payback Period

A

multiply by Present Value factor until initial invested amount reached. Disregard salvage value

39
Q

Fixed asset turnover

A

sales / average net fixed assets

40
Q

Gross Profit

A

revenue – cost of goods sold

41
Q

Income Elasticity

A

% change in quantity demanded / % change in income

42
Q

Internal Rate of Return

A

Initial Investment + Cash Flow in Period n/ (1 + Discount Rate) to the nth power (# of periods).

43
Q

Marginal utility

A

change in total utility / change in quantity

44
Q

Market/Book Ratio

A

common stock price per share (or market value)/ book value per share

45
Q

Market Capitalization

A

Common stock price per share * common stock shares outstanding

46
Q

Operating leverage

A

% change in operating income / % change in unit volume

47
Q

Operating Profit Margin

A

Operating profit / net sales

48
Q

Preferred Stock Valuation

A

dividend per share / required rate of return

49
Q

Price/Earning (PE) Ratio

A

common stock price per share / Earning per share

50
Q

Profitability Index

A

project net present value / cost of project

51
Q

Receivables Collection Period

A

Average Accounts Receivable / Credit Sales per day

52
Q

Receivable Turnover

A

Net credit sales / average accounts receivable

53
Q

Reorder Point

A

delivery time of stock + safety stock or could be stated as = average daily demand * average lead time

54
Q

Return on Assets (ROA)

A

net income / average total assets

55
Q

Return on Equity (ROE)

A

net income / Average common stockholders’ equity

56
Q

Return on Investment (ROI)

A

Net Income / Total Assets

57
Q

Return on sales (ROS)

A

net income / Sales

58
Q

Safety Stock

A

(Max. Daily demand * Max. Lead time) – reorder point

59
Q

Total asset turnover

`

A

sales / average total assets

BEC Formulas (1 decks)

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