Business Math and Calculations Flashcards

A company has current assets of $75,000 and current liabilities of $25,000. What is the current ratio?

Answer: 3:1

Current ratio = $75,000 ÷ $25,000 = 3:1.

An asset costs $12,000, has a salvage value of $2,000, and a useful life of 5 years. Using straight-line depreciation, what is the annual depreciation expense?

Answer: $2,000

Annual depreciation = (Cost − Salvage) ÷ Life = ($12,000 − $2,000) ÷ 5 = $2,000.

Total expenses are $42,000 and sales revenue is $60,000. What percentage of revenue do expenses represent?

Answer: 70%

$42,000 ÷ $60,000 = 0.70 = 70%.

A gross paycheck of $2,800 has deductions of $392.00 (federal tax), $173.60 (Social Security at 6.2%), and $40.60 (Medicare at 1.45%). What is the net pay?

Answer: $2,193.80

$2,800.00 − $392.00 − $173.60 − $40.60 = $2,193.80.

A business had beginning inventory of $8,000, purchased $22,000 in goods during the period, and has ending inventory of $5,000. What is the cost of goods sold?

Answer: $25,000

COGS = Beginning Inventory + Purchases − Ending Inventory = $8,000 + $22,000 − $5,000 = $25,000.

Total liabilities are $90,000 and total equity is $60,000. What is the debt-to-equity ratio?

Answer: 1.5

Debt-to-equity = $90,000 ÷ $60,000 = 1.5.

A petty cash fund starts with $150.00. During the period, $42.50 was spent on office supplies, $18.75 on postage, and $23.00 on miscellaneous items. How much cash should remain in the fund?

Answer: $65.75

$150.00 − $42.50 − $18.75 − $23.00 = $65.75.