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Break-even and Target Profit point Fixed Costs + Target Profit

Contribution Margin (per unit or %)

Margin of Safety Expected Sales - Break-even Sales

Cost-based pricing Full Cost + Profit = Sales price

Target-based pricing Sales price - Profit = Full cost

Production budget # units sold + ending inventory - beginning inventory

Cash Budget Cash Collections - Cash payments + Beginning cash +(-) financing
= ending cash balance

Return on Investment Operating Income


Total Assets

Sales Margin Operating Income


Sales

Capital Turnover Sales .


Total Assets

Residual Income Operating Income - (Target rate of return X Total assets)

Price/Cost Variance (Actual Price - Standard Price) X Actual Quantity

Efficiency/Quantity Variance (Actual Quantity - Standard Quantity allowed) X Standard Price

Payback period Initial Investment .


Expected annual net cash inflow
OR
Full years + Amt to complete recovery in year after full year
Net cash inflow in year after full year

Annual Rate of Return Average annual operating income


Initial Investment
OR
Average annual net cash inflow - annual depreciation
Initial investment

Net Present Value PV net cash inflows + PV residual value - Initial investment

Profitability Index Present Value of net cash inflows


Initial Investment

Inventory turnover Cost of Goods Sold .


Average inventory

Accounts receivable turnover Net credit sales .


Average net accounts receivable

Day’s sales in receivables 365 .


Accounts receivable turnover

Earnings per share Net Income - Preferred dividends


# shares of common stock outstanding

Price/Earnings ratio Market price per share of common stock


Earnings per share

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