M10 – Financial Ratio Formulas Quizlet Flashcards Now Easier to Study Than Ever!

I’ve abbreviated all the ratios in the original M10 – Ratio flashcards, so it’s easier to play the “Gravity” typing game and complete the “Learn” task than ever before! Check it out!

M10 – Ratio Formulas (Typable Edition) Study online at quizlet.com/_525cz9

1.	Accounts Receivable Turnover		SOA/AARB
2.	Acid Test Ratio		(C+CE+MS+AR+STNR)/CL
3.	Average Collection Period		365/ART
4.	Average Sale Period		365/IT
5.	Book Value Per Share		TSE/#CSO
6.	Current Ratio		CA/CL
7.	Debt To Equity Ratio		TL/SE
8.	Dividend Payout Ratio		DPS/EPS
9.	Dividend Yield Ratio		DPS/MPPS
10.	Earnings per Share		NI/A#CSO
11.	EBIT		S-R-D-COGS-SGA-D-A
12.	EBITDA		S-R-D-COGS-SGA
13.	EBT		S-R-D-COGS-SGA-D-A-IE
14.	Equity Multiplier		ATA/ASE
15.	Gross Profit		S-R-D-COGS
16.	Gross Profit Margin		GM/S
17.	Inventory Turnover		COGS/AIB
18.	Net Income		S-R-D-COGS-SGA-D-A-IE-T
19.	Net Profit Margin Percentage		NI/S
20.	Net Sales		S-R-D
21.	Operating Cycle		ASP+ACP
22.	Price Earnings Ratio		MPPS/EPS
23.	Return on Equity		NI/ASE
24.	Return on Total Assets		(NI+(IEx(1-TR)))/ATA
25.	Times Interest Earned Ratio		EBIT/IE
26.	Total Asset Turnover		S/ATA
27.	Working Capital		CA-CL

Managerial Accounting, Mod. 1 – All Formulas [WIP]

I’m still expanding this flashcard set, but you can view my work in progress (work in process?) here.

Ratio Formulas (Managerial Accounting)

Managerial Accounting, Mod. 10 – Ratio Formulas Study online at quizlet.com/_5173z5

1.	Accounts Receivable Turnover		Sales on Account / Average Accounts Receivable Balance SoA / A AR B Measures number times a company’s accounts receivable have been turned into cash during the year.
2.	Acid-Test Ratio		(Current Assets + Marketable Securities + Accounts Receivable + Short-term Notes Receivable) / Current Liabilities (CA + MS + AR + ST N/R) / CL Tests for short-term debt-paying ability without having to rely on inventory.
3.	Average Collection Period		365 days / Accounts Receivable Turnover 365 days / ART 365 days / (Sales on Account / Average accounts receivable balance) Measures average number of days taken to collect an account receivable. Note: Sometimes, a question or a class will explicitly tell you to use a 360-day year instead of a 365-day year. Pay attention to this and adjust the formula accordingly. Note 2: The only sales that are used in ART are sales ON ACCOUNT, so do not include cash sales.
4.	Average Sale Period		365 days / Inventory Turnover 365 days / (COGS / (Average Inventory Balance) 365 / (COGS /AIB) Measures the average number of days taken to sell the inventory one time
5.	Book Value Per Share		Total stockholders’ Equity / Number of Common Shares Outstanding Measures the amount that would be distributed to common stockholders if all assets were sold at their balance sheet carrying amounts and if all creditors were paid off
6.	Current Ratio		Current Assets / Current Liabilities CA / CL Short-term debt-paying ability

7.	Debt-to-Equity Ratio		Total Liabilities / Stockholders’ Equity TL / SE Measures the amount of assets being provided by creditors for each dollar of assets being provided by the stockholders Dollars from creditors : Dollars from stockholders, essentially.
8.	Dividend Payout Ratio		Dividend Per Share / Earnings Per Share DPS / EPS An index showing whether a company pays out most of its earnings in dividends or reinvests the earnings internally
9.	Dividend Yield Ratio		Dividends Per Share / Market Price Per Share DPS / MPPS Shows the return in terms of cash dividends being provided by a stock
10.	Earnings per Share (EPS)		Net income / Average number of common shares outstanding NI / A#SO Affects the market price per share, as reflected int he price-earnings ratio
11.	EBIT		EBITDA – Depreciation and Amortization Expenses Sales – Discounts and Returns – COGS – SGA – Depreciation – Amortization S – DandR – COGS – SGA – D – A
12.	EBITDA		Gross Profit – Selling, General, and Admin Expenses GP – SGA
13.	EBT		EBIT – Interest Expenses Sales – Returns and Discounts – COGS – SG A – Depreciation – Amortization – Interest
14.	Equity Multiplier		Average total assets / Average stockholders’ equity ATA / ASE Measure the portion of a company’s assets funded by equity
15.	Gross Profit		Total Sales Revenue – COGS

16.	Gross Profit	Net Sales – COGS NS – COGS Gross Sales – Returns and Discounts – COGS *More of a Financial Accounting Term
17.	Gross Profit Margin	Gross margin / Sales *Gross Margin = (Total sales revenue – COGS) / Total Sales Revenue Measure profitability before selling and administrative expenses SPOILERS below Also known as Gross Margin Percentage
18.	Inventory Turnover	Cost of Goods Sold / Average Inventory Balance COGS / AIB Measures how many times inventory has been sold during the year
19.	Net Income	EBT – Tax Expenses Revenues – Discounts and Returns – COGS – SGA – Interest – Taxes – Depreciation – Amortization
20.	Net Income Flow Chart	1. Net Sales = Gross Sales – Returns and Discounts 2. Gross Profit = Net Sales – COGS 3. EBITDA = Gross Profit – SGA 4. EBIT = EBITDA – Depreciation – Amortization 5. EBT = EBIT – Interest Expenses 6. Net Income = EBT – Tax Expenses *More of a Financial Accounting Term
21.	Net Profit Margin Percentage	Net Income / Sales (Revenue – COGS – Operating Expenses – SGA – Depreciation – Amortization – Interest Expenses – Tax Expenses) / Sales A broad profitability measure
22.	Net Sales	Gross Sales – Returns and Discounts *More of a Financial Accounting Term

These ratios correspond with Exhibit 15-6: Summary of Ratios in the Managerial Accounting (16th ed.) textbook by Garrison (McGraw-Hill).

You can find an updated version of this Quizlet flashcard set here.

 

Don’t be alarmed by how long the definitions on my flashcards are. I like to restate formulas in terms of abbreviations (e.g., NI = Net Income), just because it sticks in my head more. And for long-winded formulas and formulas with similar numerators and denominators like Dividend Payout Ratio, it’s easier to remember DPS / EPS than “Dividends per share divided by earnings per share.”

I recommend viewing the flashcards on Quizlet and testing yourself. Remember you can use the following shortcuts to navigate between the flashcards. Some may not be available if you’re not the editor or owner of the flashcard set:

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I’m on Quizlet!

I started tinkering with Quizlet about a week ago and here’s what I’ve completed so far, in between working on homework assignments and quizzes that take me anywhere from three to six hours to complete. I’ve always had the account, but I never used it until now.

Quizlet has an awesome feature that allows me to bulk-import flashcards on an Excel spreadsheet or Word doc, but for now, I’m making these cards manually, as seeing them in a flashcard format on the screen somehow helps me better with memory retention than creating an enormous CSV file. I also noticed that, while I was creating the cards through a CSV file, the first impulse I had was to take the lazy (i.e. programmer’s) route, which is to CTRL + C and CTRL + V all my vocabulary terms into that sucker. Which totally defeats the purpose of mindful learning.

Yes, studying is a type of mindful meditation. Think about it–you have to sit in the same position for anywhere from half and hour to half a day, without moving much, and without allowing distractions to linger too long in your mind.

Fundamental Manufacturing Accounting Formulas

While it’s vital to understand concepts in managerial accounting, sometimes it’s hard to visualize an entire income statement in your head, especially when you have under 1.5 minutes to answer each question on the CMA exam.

Remember these quick and dirty formulas:

1. Direct materials used = Beginning materials inventory + Purchases – Ending materials inventory
2. Total manufacturing costs charged = Direct materials used + Direct labor + Factory overhead
3. Cost of Goods Manufactured = Beginning work-in-process + Total manufacturing costs – Ending work-in-process
4. Cost of goods sold = Cost of goods manufactured – Ending finished goods inventory

Mini-formulas:

1. 1. DM_used = BI_M + P – EI_M
   2. TMC_charged = DM_used + DL + OH_Factory
   3. COG_M = BWIP + TMC – EWIP
   4. COG_S = COG_M – EI_FG