A Comprehensive Guide to Essential Accounting and finance Formulas

Welcome to our detailed overview of fundamental Accounting and finance formulas, thoughtfully organized from the most commonly utilized to those less frequently encountered. This resource serves as a vital tool for students, accountants, financial professionals, and business owners alike. Whether you aim to enhance your financial acumen or simply want a quick reference, this list has you covered.

Most Commonly Used Formulas

1. Gross Profit

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

3. Gross Profit Margin

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

5. Net Profit

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

7. Net Profit Margin

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

9. Operating Profit

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

11. Operating Profit Margin

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

13. Cost of Goods Sold (COGS)

14. Formula: COGS = Direct Materials + Direct Labor + Overheads

15. EBITDA

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

17. Earnings Per Share (EPS)

18. Formula: EPS = Net Profit / Number of Shares

19. Price-Earnings (P/E) Ratio

    • Formula: P/E Ratio = Stock Price / EPS

20. Break-Even Point (BEP)

    • Formula: BEP = Fixed Costs / (Selling Price – Variable Cost)

21. Current Ratio

    • Formula: Current Ratio = Current Assets / Current Liabilities

22. Quick Ratio (Acid-Test)

    • Formula: Quick Ratio = (Current Assets – Inventory) / Current Liabilities

23. Debt-to-Equity Ratio

    • Formula: Debt-to-Equity = Total Debt / Shareholder Equity

24. Return on Investment (ROI)

    • Formula: ROI = (Gain – Cost) / Cost × 100

25. Return on Assets (ROA)

    • Formula: ROA = Net Profit / Total Assets