Basic Accounting & Finance Formulas
Basic Accounting & Finance Formulas 1. Gross Profit = Sales - Cost of Goods Sold 2. Gross Profit Margin = (Gross Profit + Sales) × 100 3. Operating Profit = Gross Profit - Operating Expenses 4. Operating Profit Margin = (Operating Profit + Sales) x 100 5. Net Profit Operating Profit - (Taxes + Interest) 6. Net Profit Margin = (Net Profit + Sales) × 100 7. Return on Investment (ROI) = (Gain Cost) × 100 8. Return on Equity (ROE) = (Net Profit ÷ Shareholders' Equity) × 100 9. Asset Turnover = Sales + Total Assets 10. Inventory Turnover = Cost of Goods Sold ÷ Average Inventory 11. Days Sales Outstanding (DSO) = (Accounts Receivable Sales) × Number of Days 12. Days Inventory Outstanding (DIO) = (Inventory ÷ Cost of Goods Sold) x Number of Days 13. Current Ratio = Current Assets + Current Liabilities 14. Quick Ratio = (Current Assets - Inventory) + Current Liabilities 15. Debt-to-Equity Ratio = Total Debt Shareholders' Equity 16. Earnings Per Share (EPS) = Net P...