Financial Accounting and Reporting Exam - FORMULAE SHEET

Earnings before interest and tax (a) The profit before taxation; plus (b) Interest; plus (c) Tax
Earnings before interest and taxation
Return on Investment (ROI) × 100%
Total assets less current liabilities

Profit margin × Asset turnover EBIT Sales EBIT

× = = ROI
= Return on investment Sales Investment Investment
Earnings before interest and tax
Return on assets (ROA) × 100%
Total assets
Profit after tax and preference dividend
Return on equity (ROE) × 100%
Shareholders’ equity
Profit after tax and preference dividend Sales Assets
Profit margin × Asset turnover × Assets to equity × × = ROE
= Return on equity Sales Assets Equity
Interest bearing debt
Gearing × 100%
Shareholders’ equity + interest bearing debt
Non-current assets + net current assets
Assets to equity ratio × 100%
Shareholders’ equity
Interest bearing debt
Debt to total assets ratio × 100%
Total assets
Shareholders’ equity
Equity to assets ratio × 100%
Non-current assets + net current assets
Shareholders’ equity
or × 100%
Total assets less current liabilities
Earnings before interest and tax
Interest cover
Interest charges
Current assets
Current ratio
Current liabilities
Current assets less inventory
Quick ratio
Current liabilities
Trade receivables
Accounts receivable collection period × 365 days
Sales
Inventory
Inventory turnover period × 365 days
Cost of sales
Cost of sales
Inventory turnover
Inventory
Trade accounts payable
Accounts payable payment period
× 365 days
Purchases
Profit attributable to ordinary shareholders
Earnings per share (EPS)
Number of ordinary shares in issue
Earnings per share
Dividend cover
Dividend per (ordinary) share
Current share price
Price earnings (P/E) ratio
EPS
Dividend per share for the year
Dividend yield
× 100%
Current market value of the share (ex-div)