C213 cheat sheet PDF

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C213 – Accounting for Decision Makers “Cheat Sheet” Formulas and other information included in Preassessment and Assessment Balance Sheet: Assets = Liabilities + Owner’s Equity Income Statement: Sales - Cost of goods sold (COGS) = Gross profit - Administrative expenses - Depreciation - Other expenses = Earnings before interest and taxes (EBIT) - Interest = Earnings before taxes (EBT) - Taxes = Net Income (Profit) Owners Equity: Assets/Liabilities = Owners Equity Statement of Cash flows Cash flows from operating activities: + Cash flows from investing activities + Cash flows from financing activities Net increase (decrease) in cash

Common Financial Statement Ratios Debt Ratio: total liabilities / total assets Current Ratio: current assets / current liabilities Return on Assets (ROA): net income / total assets Asset Turnover (AT): total sales / total assets Return on Equity (ROE): net income / stockholders’ equity Return on Sales (profit margin) (ROS): net income / sales Price-Earnings ratio (PE): market value of shares / net income

DuPont Framework (Identity) Return on equity = Return on Sales x Asset turnover x Assets to equity ratio

Cash Flow Ratios Cash Flow to Net Income: Cash Flow Adequacy:

cash from operations / net income cash from operations / cash required for investments

Cash Times Interest Earned: cash from operations before interest and taxes / cash paid for interest Activity Based Costing (ABC): 1. Identify overhead cost activities. 2. Analyze individual overhead costs in terms of the cost activities. 3. Identify measureable cost drivers. 4. Assign overhead based on the cost drivers.

Cost-Volume-Profit (C-V-P): Break Even (BE): Sales – Variable Costs (VC) – Fixed Costs (FC) = -0- Profit Sales – VC – FC = Target Income (for a specific target income level) Contribution Margin (CM): Sales – VC Contribution Margin Ratio: CM / Sales

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