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Title: Business Accounting Formulae
Description: Basic and complex formulae and ratios for business accounting.
Description: Basic and complex formulae and ratios for business accounting.
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General Business Formulae
Market Value of a company = No
...
Present value= Sn x (1/1+r^n)
...
Risk premium- amount of money you're risking in order to take the
chance of making MORE money
...
MRP records- inventory control system: software to manage stock on
websites (in-stock, out of stock etc)
...
Collusion- oligopolies decide on a price level and all firms in that
market set them that high so there are no substitutes and therefore
they can all sell at high prices and sustain demand (regardless of
elasticity)
...
IRR is the discount/interest rate (return) that 'MAKES' NPV 3 = 0
...
Discount Rate= (Equity Capital% x Cost of Equity%) + (Debt Capital% x
Cost of Debt%)
Cost of Debt: interest rate
...
per share (for next year)/ market value of stock) +
Growth Rate of Dividends
...
Depending on type of debt: interest might be tax deductible (because it's an
expense)
...
[Interest expense (after tax)/TOTAL liabilities]x100% = average interest rate
...
Equity Capital= Equity/(Equity+Total liabilities)x100%
...
Beta: only used for stock prices and market index as benchmark-Covariance of both returns/ Variance of market return
...
of Y)- Beta] x Av
...
Stock market reaction (robustness):
- ROA = independent variable
...
- KLD index (stock return for CSR companies) (industry-adjusted*)=
dependant variable
...
- Firm Size and Firm Revenue= control variables
...
*subtract KLD index across ALL firms
...
Trial Balance Adjustments
Adjustments:
- dividends payable
Dr retained earnings (equity: credit: reduce)
...
- dividends paid
Dr dividends payable (liability: credit: reduce)
Cr cash (asset: debit: reduce)
...
- unpaid road tax & ins
...
Cr accruals (liability: credit: increase)
...
When Receivables are announced, Revenue is credited (increased) and
Receivables are debited (increased)
...
- Receivables announced
Dr Receivables (asset: debit: increase)
Cr Revenue (Income: credit: increase)
- Receivables paid
Dr Cash (asset: debit: increase)
Cr Receivables Announced (asset: debit: reduce)
...
Sin: length- (a/sinA)=(b/sinB)=(c/sinC)
...
Cos: length- a^2= b^2 + c^2 - 2bcCosA
...
Sin2x= 2sinxcosx
...
= 2cos^2 x -1
...
Tan2x= (2tanx)/(1-tan^2 x)
...
Cosec^2x = 1+ cot^2 x
Title: Business Accounting Formulae
Description: Basic and complex formulae and ratios for business accounting.
Description: Basic and complex formulae and ratios for business accounting.