POA Formula Sheet

PRINCIPLES OF ACCOUNTS FOR MULAE Chapter 3 Basic Accounting Equation: Assets – Liabilities = Equity Sole Proprietorship Equation: Assets – Liabilities + Capital + (Income – Expenses) – Drawings Chapter 11 Depreciation Straight-line Method 1: (Original Cost – Scrap Value) / Useful life Straight-line Method 2: Rate of Depreciation per annum (%) x Or iginal Cost – Scrap Value Reducing Balance Method: Rate of Depreciation per annum (%) x Net Book Value Net Book Value: Cost – Accumulated Depreciation Chapter 16 Profitability Gross Profit Margin (%) = (Gross Profit / Net Sales Revenue) x 100 Mark-up on Cost (%) = (Gross Profit / Cost of Sales) x 100 Profit Margin (%) = (Profit for the Year / Net Sales Revenue) x 100 Return on Equity (%) = (Profit for the Year / Average Equi ty) x 100 Average Equity = (Beginning Equity + Ending Equity) / 2 Liquidity Current Ratio (Times) = Total Current Assets / Total Current Liabilities Quick Ratio (Times) = Quick Assets / Total Current Liabilities Quick Assets = Total Current Assets – Inventory – Prepayments

Inventory Management Rate of Inventory Turnover (Times) = Cost of Sales / Average Inventory Day sales in Inventory (Days) = (Average Inventory / Cost of Sales) x 365 Days Average Inventory = (Beginning Inventory + Ending Inventory) / 2 Trade Receivables Management Rate of Trade Receivables Turnover (Times) = Net Credit Sales Revenue OR Service Fee Revenue / Average Net Trade Receivables Trade Receivables Collection Period = Average Net Trade Receivables / Net Credit Sales Revenue OR Service Fee Revenue Average Net Trade Receivables = (Beginning Net TR + Ending Net TR) / 2