At the core of accounting, there lie equations. This discipline uses various formulas to determine vital financial information of a business. Those who are self-employed or run a small business must sometimes act as an accountant, implementing these standard accounting formulas to procure their needed financial information.
Listed below are 12 of the most basic accounting equations a small business might need for their bookkeeping requirements. This list can be divided into three parts, equations that measure cost analysis, those that calculate profitability, and one formula for measuring cash flow.