Comprehensive Guide to Key Accounting and finance Formulas

Welcome to our detailed resource featuring a curated list of vital Accounting and finance formulas. This guide is designed for a wide audience — from students and seasoned accountants to finance professionals and business owners. Each formula is strategically ranked based on its frequency of use, ensuring that you have access to the most relevant calculations at your fingertips.

Top 20 Commonly Used Formulas

1. Gross Profit
   Formula: Gross Profit = Sales – Cost of Goods Sold

2. Gross Profit Margin
   Formula: Gross Profit Margin = (Gross Profit / Sales) × 100

3. Net Profit
   Formula: Net Profit = Operating Profit – Interest – Taxes

4. Net Profit Margin
   Formula: Net Profit Margin = (Net Profit / Sales) × 100

5. Operating Profit
   Formula: Operating Profit = Gross Profit – Operating Expenses

6. Operating Profit Margin
   Formula: Operating Profit Margin = (Operating Profit / Sales) × 100

7. Cost of Goods Sold (COGS)
   Formula: COGS = Direct Materials + Direct Labor + Overheads

8. EBITDA
   Formula: EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization

9. Earnings Per Share (EPS)
   Formula: EPS = Net Profit / Number of Shares

10. Price-Earnings (P/E) Ratio
    Formula: P/E Ratio = Stock Price / EPS

11. Break-Even Point (BEP)
    Formula: BEP = Fixed Costs / (Selling Price – Variable Cost)

12. Current Ratio
    Formula: Current Ratio = Current Assets / Current Liabilities

13. Quick Ratio (Acid-Test)
    Formula: Quick Ratio = (Current Assets – Inventory) / Current Liabilities

14. Debt-to-Equity Ratio
    Formula: Debt-to-Equity = Total Debt / Shareholder Equity

15. Return on Investment (ROI)
    Formula: ROI = (Gain – Cost) / Cost × 100

16. Return on Assets (ROA)
    Formula: ROA = Net Profit / Total Assets

17. **Return on Equity (ROE