WGU C928 - WGU IT Finance (Formulas) 100% Correct

WGU C928 - WGU IT Finance (Formulas) 100% Correct Accounting Equation Assets = Liabilities+Equity Ratio of Liabilities to Stockholders' Equity Ratio of Liabilities to Stockholders' Equity = Total Liabilities / Total Stockholders' Equity Working Capital Working Capital = Current Assets - Current Liabilities Current Ratio Current Ratio = Current Assets / Current Liabilities Ratio of Free Cash Flow to Sales Ratio of Free Cash Flow to Sales = Free Cash Flow / Sales Quick Ratio Quick Ratio = Quick Assets / Current Liabilities Accounts Receivable Turnover Accounts Receivable Turnover = Sales / Average Accounts Receivable Sales in Receivables Number of Days' Sales in Receivables = Average Accounts Receivable / Average Daily Sales Average Daily Sales Average Daily Sales = Sales / 365 Days Ratio of fixed assets to long-term liabilities Ratio of Fixed Assets to Long-Term Liabilities = Fixed Assets (net) / Long-Term Liabilities Asset Turnover Asset Turnover = Sales / Average Total Assets (excluding long-term investments) Return on Total Assets Return on Total Assets = (Net Income + Interest Expense) / Average Total Assets Return on Stockholder's Equity Return on Stockholders' Equity = Net Income / Average Total Stockholders' Equity Return on Common Stockholders; Equity Return on Common Stockholders' Equity = (Net Income - Preferred Dividends) / Average Common Stockholders' Equity Earnings per Share (EPS) Earnings per Share (EPS) on Common Stock = (Net Income - Preferred Dividends) / Shares of Common Stock Outstanding Price-Earnings Ratio Price-Earnings (P/E) Ratio = Market Price per Share of Common Stock / Earnings per Share of Common Stock Inventory Turnover Inventory Turnover = Cost of Goods Sold / Average Inventory Number of Days' Sales in Inventory Number of Days' Sales in Inventory = Average Inventory / Average Daily Cost of Goods Sold Average Daily Cost of Good Sold Average Daily Cost of Goods Sold = Cost of Goods Sold / 365 Days Times Interest Earned Times Interest Earned = (Income Before Income Tax + Interest Expense) / Interest Expense Return on Operating Assets Return on Operating Assets = Income from Operations / Average Operating Assets Dividends per Share Dividends per Share = Dividends on Common Stock / Shares of Common Stock Outstanding Dividends Yield Dividends Yield = Dividends per Share of Common Stock / Market per Share of Common Stock Occupancy Rate Occupancy Rate = Guest Nights / Available Room Nights Fixed Costs Fixed Cost = Total Costs - (Variable Cost per Unit * Units Produced) Contribution Margin Contribution Margin = Sales - Variable Costs Contribution Margin Ratio Contribution Margin Ratio = Contribution Margin / Sales Change in Income from Operations Change in Income from Operations = Change in Sales Dollars * Contribution Margin Ratio Unit Contribution Margin Unit Contribution Margin = Sales Price Per Unit - Variable Cost Per Unit Break-Even Sales Break-Even Sales (units) = Fixed Costs / Unit Contribution Margin Sales Sales (units) = (Fixed Costs + Target Profit) / Unit Contribution Margin Service Department Charge Rate Service Department Charge Rate = Service Department Expense / Total Service Department Usage Return on Investment Return on Investment (ROI) = Income from Operations / Invested Assets Average Rate of Return Average Rate of Return = Average Annual Income / Average Investment Average Investment Average Investment = (Initial Cost + Residual Value) / 2 Cash Payback Period Case Payback Period = Initial Cost / Annual Net Cash Inflow Present Value Index Present Value Index = Total Present Value of Net Cash Flow / Amount to be Invested Cost of Debt Equation: Cost of Preferred Stock Equation: The CAPM Approach (Required Rate of Return, rs) Equation: Discounted Cash Flow (DCF) Approach (Expected Rate of Return, {hat{r}}_{s}r^s) Equation: Cost of Newly Issued Common Stock (External Equity), re Equation: Weighted Average Cost of Capital (WACC) Equation: Degree of Operating Leverage (DOL) Equation: Degree of Financial Leverage (DFL) Equation: Degree of Total Leverage (DTL) Equation: Cost of Goods Sold (COGS) COGS = Beginning FGI + COGM - Ending FGI Cost of Goods Manufactured (COGM) COGM = Beginning WIP + Total Manufacturing Cost - Ending WIP Total Manufacturing Cost Total Manufacturing Cost = Raw Materials Used + Direct Labor + Manufacturing Overhead Raw Materials Used Raw Materials Used = Beginning Raw Materials + Purchases - Ending Raw Materials Variable Cost per Unit (Using high/low method) Variable cost per unit = (High Cost - Low Cost) / (High Production - Low Production) Fixed Cost (Using high/low method) Fixed Cost = Total Cost - (VC per Unit * Number of Units) Contribution Margin Ratio CMratio = CM / Sales Break-Even Point (units) BE(units) = Fixed Costs / ((Price per Unit) - (VC per Unit)) Target Net Income (units) TargetNI(units) = (FC+NI)/UCM Weighted Contribution Margin Operating Leverage Operating Leverage = CM / NI Margin of Safety MOS = (Sales - Sales at BE Point) / Sales