JAIIB AFM All Formulas List 2026 — Must-Know for Exam Day
Complete list of important AFM formulas for JAIIB 2026: NPV, IRR, EMI, depreciation, ratios, break-even, TVM, and more. Organized module-wise for quick revision.
AFM (Accounting & Financial Management for Bankers) is the most formula-heavy JAIIB paper. Around 30-40% of questions involve calculations. Here's every formula you need, organized by module.
Module A — Accounting Principles
📐 Depreciation Formulas
Straight Line Method (SLM)
Depreciation = (Cost - Residual Value) ÷ Useful Life
Rate = (1 ÷ Useful Life) × 100
Written Down Value (WDV)
Depreciation = Book Value at beginning × Rate%
Rate = 1 - (Residual Value / Cost)^(1/n) × 100
📊 Bank Reconciliation Statement (BRS)
Adjusted Bank Balance
= Balance as per Bank Statement
+ Cheques issued but not yet presented
- Cheques deposited but not yet cleared
± Direct credits/debits by bank
Module B — Financial Statements & Ratios
📈 Key Ratios (Most Tested)
Current Ratio
= Current Assets ÷ Current Liabilities
Ideal: 2:1
Quick/Acid Test Ratio
= (CA - Inventory - Prepaid) ÷ CL
Ideal: 1:1
Debt-Equity Ratio
= Total Debt ÷ Shareholders' Equity
Ideal: 2:1 or lower
Return on Equity (ROE)
= Net Profit ÷ Shareholders' Equity × 100
Net Profit Margin
= Net Profit ÷ Revenue × 100
Gross Profit Margin
= (Revenue - COGS) ÷ Revenue × 100
Inventory Turnover
= COGS ÷ Average Inventory
Debtors Turnover
= Credit Sales ÷ Average Debtors
Module C — Financial Management (TVM & Capital Budgeting)
⏰ Time Value of Money
Future Value (Compound Interest)
FV = PV × (1 + r)ⁿ
PV = Present Value, r = rate per period, n = number of periods
Present Value
PV = FV ÷ (1 + r)ⁿ
EMI Formula
EMI = P × r × (1+r)ⁿ ÷ [(1+r)ⁿ - 1]
P = Principal, r = monthly rate, n = total months
Rule of 72 (Quick Doubling Time)
Doubling Time ≈ 72 ÷ Interest Rate%
Example: At 8% → money doubles in ~9 years
💰 Capital Budgeting
Net Present Value (NPV)
NPV = Σ [Cash Flow_t ÷ (1+r)^t] - Initial Investment
Accept if NPV > 0
Internal Rate of Return (IRR)
Rate at which NPV = 0
Accept if IRR > Cost of Capital
Payback Period
= Initial Investment ÷ Annual Cash Inflow
(For uneven flows: cumulative method)
Profitability Index (PI)
PI = PV of future cash flows ÷ Initial Investment
Accept if PI > 1
Module D — Taxation & Costing
🧮 Break-Even & Costing
Break-Even Point (Units)
BEP = Fixed Costs ÷ (Selling Price - Variable Cost per unit)
Break-Even Point (Sales ₹)
BEP = Fixed Costs ÷ Contribution Margin Ratio
CM Ratio = (SP - VC) ÷ SP
Margin of Safety
= Actual Sales - Break-Even Sales
P/V Ratio (Profit Volume Ratio)
= Contribution ÷ Sales × 100
Exam Tips for AFM Calculations
- Learn the formula + one solved example — IIBF tests application, not just memorization
- Focus on NPV & ratio questions — they appear in every exam (5-8 questions guaranteed)
- Use the Rule of 72 for quick approximations on TVM questions
- BEP questions are scoring — straightforward calculations if you know the formula
- Practice on calculator — the exam allows a basic on-screen calculator
Practice AFM Calculations
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