Accounting Equations

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Double-Declining Depreciation

(Cost - Accumulated Depreciation) X (2/Life)

Straight-Line Depreciation

(Cost - Residual Value) / Life

Depreciation Expense Equation

(Cost - Residual Value) / Useful lifetime

Current Ratio Equation

(Current Assets)/(Current Liabilities )

Times Interest Earned

(Net Income + Tax Expense + Interest Expense) / Interest Expense

Earning per Share (EPS)

(Net Income - Preferred Stock Dividend) / # Common Stock Shares Outstanding

Cost of Goods Available for Sale

Beginning Inventory + Net Purchase = Total inventory cost

Retained Earning Equation

Beginning Retained Earning + Net Income -Dividends =

Total Equity Equation

Common Stock + Retained Earning

Working Capital Equation

Current Assets - Current Liabilities

Price Earning Ratio (P/E)

Market Price per Share / Earning per Share (EPS)

Return on Equity (ROE)

Net Income / Average Equity

Present Value of a Lump Sum

Present Value = Future Value X PV Factor

Present Value of an Annuity

Present Value of Annuity = Payment X PVA Factor

Interest Expense Equation

Principal X Rate X Time

Net Income Equation

Revenues - Expenses

Gross Profit Equation

Sale Revenue - Cost of Good Solds

Debt-to-Equity

Total Liabilities / Total Stockholders' Equity

Units of Production

[(Cost - Residual Value) / Useful Lifetime Units Production] X Actual Usage in the Year

Assets Liabilites Equity Equation

Assets = Liabilities + Equity

Future Value of a Lump Sum

Future Value = Present Value X FV Factor

Future Value of an Annuity

Future Value of Annuity = Payment X FVA Factor


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