Accounting and finance can feel
overwhelming at first, but once you understand the core formulas, everything
becomes much easier. Whether you are preparing for BCS, bank jobs, or corporate
exams, these formulas are your foundation.
Let’s break them down in a clear
and practical way so you can actually use them, not just memorize them.
🔹 Profitability Formulas
(Understanding Business Performance)
These formulas help you measure how
much profit a business is making.
- Gross
Profit =
Sales – Cost of Goods Sold
- Gross
Profit Margin
= (Gross Profit ÷ Sales) × 100
This tells you how efficiently a
company produces goods.
- Operating
Profit =
Gross Profit – Operating Expenses
- Operating
Profit Margin
= (Operating Profit ÷ Sales) × 100
Shows profit after covering daily
operating costs.
- Net
Profit =
Operating Profit – (Taxes + Interest)
- Net
Profit Margin
= (Net Profit ÷ Sales) × 100
This is the final profit a business
keeps.
🔹 Investment & Return Ratios
These formulas help evaluate
returns and efficiency.
- Return
on Investment (ROI)
= (Gain ÷ Cost) × 100
- Return
on Equity (ROE)
= (Net Profit ÷ Shareholders’ Equity) × 100
- Return
on Assets (ROA)
= Net Profit ÷ Total Assets
- Return
on Capital Employed (ROCE)
= EBIT ÷ (Total Assets – Current Liabilities)
👉 These are very important for viva
and written exams.
🔹 Efficiency & Activity Ratios
Used to measure how well assets are
being utilized.
- Asset
Turnover =
Sales ÷ Total Assets
- Inventory
Turnover =
Cost of Goods Sold ÷ Average Inventory
Higher values generally mean better
efficiency.
- Days
Sales Outstanding (DSO)
= (Accounts Receivable ÷ Sales) × Number of Days
- Days
Inventory Outstanding (DIO)
= (Inventory ÷ Cost of Goods Sold) × Number of Days
👉 These show how fast a business
collects cash and sells inventory.
🔹 Liquidity Ratios (Short-Term
Strength)
These measure the company’s ability
to pay short-term liabilities.
- Current
Ratio =
Current Assets ÷ Current Liabilities
- Quick
Ratio =
(Current Assets – Inventory) ÷ Current Liabilities
👉 Quick ratio is stricter because it
excludes inventory.
🔹 Leverage & Risk Ratios
Used to understand financial risk.
- Debt-to-Equity
Ratio = Total
Debt ÷ Shareholders’ Equity
- Financial
Leverage =
EBIT ÷ EBT
- Operating
Leverage =
Contribution ÷ EBIT
👉 Higher leverage = higher risk, but
also higher potential return.
🔹 Share Market & Valuation
Important for finance-related jobs.
- Earnings
Per Share (EPS)
= Net Profit ÷ Number of Shares
- Price-to-Earnings
(P/E) Ratio =
Stock Price ÷ EPS
👉 Investors use these to evaluate
company value.
🔹 Costing & Break-Even Analysis
- Break-Even
Point (BEP) =
Fixed Costs ÷ Contribution per Unit
- Margin
of Safety =
((Sales – BEP) ÷ Sales) × 100
👉 These help in decision-making and
risk analysis.
- Cost
of Goods Sold (COGS)
= Direct Materials + Direct Labor + Overheads
🔹 Capital Budgeting Techniques
Very important for exams and
real-life financial decisions.
- Payback
Period =
Initial Investment ÷ Annual Cash Inflows
- Discounted
Payback Period
= Time to recover investment using discounted cash flows
- Net
Present Value (NPV)
= PV of Future Cash Flows – Initial Investment
- Internal
Rate of Return (IRR)
= Discount rate where NPV = 0
- Profitability
Index (PI) =
PV of Future Cash Flows ÷ Initial Investment
- Accounting
Rate of Return (ARR)
= (Average Profit ÷ Average Investment) × 100
👉 These are frequently asked in
exams.
🔹 Advanced Financial Concepts
- Residual
Income (RI) =
Operating Profit – (Capital Employed × Cost of Capital)
- Economic
Value Added (EVA)
= NOPAT – (Capital Employed × WACC)
- Cash
Conversion Cycle (CCC)
= DIO + DSO – DPO
- Cost
of Capital (WACC)
= Weighted Average Cost of Debt and Equity
👉 এগুলো একটু অ্যাডভান্সড, কিন্তু চাকরির
পরীক্ষায় খুব গুরুত্বপূর্ণ।
✅ Final Thoughts
You don’t need to memorize all
formulas in one day.
Start small:
- First
learn Profit & Margin formulas
- Then
move to Ratios
- Finally
practice numerical problems
Consistency is the real key.
If you practice these regularly, accounting and finance will become one of your
strongest areas.
📌 Tip: Save this list and revise it
daily for 10 minutes.
That alone can give you an edge in exams.
📘 BCS প্রস্তুতির জন্য গুরুত্বপূর্ণ সাধারণ জ্ঞান (সম্পূর্ণ প্রশ্নোত্তর সংগ্রহ)
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