JAIIB Exam – Most Important Formulas of AFB

Important formulas provided in this article for Accounting & Finance for Bankers (AFB) JAIIB Exam.

Most Important Formulas of AFB for JAIIB Exam

JAIIB Exam Formulas : JAIIB exam conducted by IIBF twice in a year. JAIIB or DBF exam is a certification exam for those who want to grow in Banking sector in India. here in this article we are providing the Most important formula of  Accounting & Finance for Bankers (AFB) subjects.

Go through all the formulas carefully provided in this article which will help you to boost your score for JAIIB AFB exam.

Calculation Of Interest and Annuities

  • PV = Future Value
  • C = Cash flow per period
  • I = interest rate
  • N = Number of payments

  • EMI = Equated Monthly Installment
  • P = Principal (Amount of loan)
  • R = rate of interest per installment
  • N = No. of Installments in year

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Calculation Of YTM

Capital Budgeting

  • IRR = Internal rate of return
  • LR = Lower rate
  • NPVL = Net present value at lower rate
  • PVL = present value at lower rate
  • PVH =present value at higher rate
  • HR = Higher rate
  • LR = lower rate

Depreciation And Its Accounting

  1. SLM = 𝐶𝑃−𝑆𝑉/ 𝐸𝑠𝑡𝑖𝑚𝑎𝑡𝑒𝑑 𝐿𝑖𝑓𝑒 𝑜𝑓 𝐴𝑠𝑠𝑒𝑡 (𝑖𝑛 𝑦𝑒𝑎𝑟𝑠)
  • SLM = straight line method
  • CP= cost Price
  • SV= scrap value
  1. WDV = previous year’s value of asset × percentage rate

WDV = written down value method of depreciation

  1. Double Declining Method of Depreciation
  •  Calculate depreciation rate under SLM
  • RATE × 2
  • This rate is applied on written down value of asset
  • In which year WDV is less than depreciation under SLM. Double declining rate of depreciation is not applied. Whole written down value of asset is charged as depreciation for that  year.

Foreign Exchange Arithmetic

Balance Sheet Equation

  • Assets = Liabilities + Capital
  • Income = Revenue – Expenses
  • Sales = cost of sales + Gross profit
  • Sales = Stock in the beginning + Purchases +Direct Expenses – Stock at       the end + Gross profit
  • Gross profit = Sales – cost of sales


Profitability Ratios

Return on investment: It measures how much the organization is earning on its capital employed.

Earnings Per Share (EPS)

  • The ratio denotes per share profit of a
  • It can be used to compare 2 different companies’ )
  • To calculate the ration only the no. of equity share is taken (and not of preference shares).

Price Earnings Ratio (PER)

  • The ratio indicates the current market price vis-à-vis the earning per

Return on equity

  • This ratio provides information about the earnings, which the funds put in by the promoters/shareholders. The ratio can be worked out as under:

 Gross Profit Ratio

  • The gross profit is considered to be the surplus of sales over the cost of goods sold and the ratio can be worked out as under:

Net Profit Ratio

  • The net profit is the surplus of gross profit after meeting other The ratio can be worked out as under:

(The net profit could be before or after tax)

Operating Profit ratio

  • The ratio denotes the margin of profit on the main operations revealing the operational efficiency of the unit.

(Profit minus net other income or profit from un-related activity)

Short Term Solvency Ratio

Long Term Solvency Ratio

Activity Ratios / Turnover Ratios

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