SEBI Grade A Formula Sheet
Ten formulas, what each one is for, and a worked example.
SEBI Grade A Paper 2 for the General stream covers commerce, accounting, finance, management and economics. Its numerical questions come from a recognisable set of accounting ratios and finance formulas.
These ten cover them, with a worked EPS and P/E example.
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The 10 Formulas
1
Formula
Earnings per share
Expression
Net profit for equity shareholders ÷ Number of equity shares
Use it for
Per-share profitability.
2
Formula
P/E ratio
Expression
Market price ÷ EPS
Use it for
Equity valuation multiple.
3
Formula
Current ratio
Expression
Current assets ÷ Current liabilities
Use it for
Liquidity.
4
Formula
Debt-equity ratio
Expression
Long-term debt ÷ Shareholders' funds
Use it for
Leverage.
5
Formula
Return on equity
Expression
Net profit ÷ Shareholders' equity × 100
Use it for
Return to owners.
6
Formula
Break-even point (units)
Expression
Fixed costs ÷ Contribution per unit
Use it for
Cost accounting.
7
Formula
Straight-line depreciation
Expression
(Cost − Salvage) ÷ Useful life
Use it for
Accounting for fixed assets.
8
Formula
CAPM
Expression
E(R) = R_f + β × (R_m − R_f)
Use it for
Cost of equity and required return.
9
Formula
NAV of a mutual fund
Expression
(Assets − Liabilities) ÷ Units outstanding
Use it for
Securities market products.
10
Formula
Real interest rate
Expression
(1 + Nominal) ÷ (1 + Inflation) − 1
Use it for
Economics.
| # | Formula | Expression | Use it for |
|---|---|---|---|
| 1 | Earnings per share | Net profit for equity shareholders ÷ Number of equity shares | Per-share profitability. |
| 2 | P/E ratio | Market price ÷ EPS | Equity valuation multiple. |
| 3 | Current ratio | Current assets ÷ Current liabilities | Liquidity. |
| 4 | Debt-equity ratio | Long-term debt ÷ Shareholders' funds | Leverage. |
| 5 | Return on equity | Net profit ÷ Shareholders' equity × 100 | Return to owners. |
| 6 | Break-even point (units) | Fixed costs ÷ Contribution per unit | Cost accounting. |
| 7 | Straight-line depreciation | (Cost − Salvage) ÷ Useful life | Accounting for fixed assets. |
| 8 | CAPM | E(R) = R_f + β × (R_m − R_f) | Cost of equity and required return. |
| 9 | NAV of a mutual fund | (Assets − Liabilities) ÷ Units outstanding | Securities market products. |
| 10 | Real interest rate | (1 + Nominal) ÷ (1 + Inflation) − 1 | Economics. |
Worked Example: EPS and P/E
A company earns ₹50 crore after tax and has 10 crore shares. The share price is ₹100.
- 1
EPS
50 ÷ 10 = ₹5 per share.
- 2
P/E
100 ÷ 5 = 20.
- 3
Read it
Investors pay ₹20 for each rupee of annual earnings.
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Learn the Accounting Definitions
SEBI's commerce questions often turn on definitions, such as whether preference dividend is deducted before EPS (it is). Get the definitions right and the arithmetic is easy.
FAQs
Which SEBI Grade A stream uses these formulas?expand_more
Mainly the General stream's Paper 2. Other streams such as Legal and IT sit different Paper 2s.
Is Phase 1 Paper 1 numerical?expand_more
Paper 1 has quantitative aptitude, which uses standard arithmetic, along with reasoning, English and general awareness.
Are calculators allowed?expand_more
Check SEBI's current instructions. Most recruitment exams don't allow them.
Next steps
Take a full SEBI Grade A mock testFull Phase 1 mocks on this exact syllabus, scored instantly.