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How physical and magic attacks are calculated by the game.
Damage Equations
In this guide, we will explain the equations for damage and what variables add up to more or less attacking power.
Damage Equations: Physical
Variables Being Used
a Attack power of the attacker.
b Defense power of the defender.
c Attack modifier of berserk status.
1.5 while active.
d Attack modifier of elemental rune attached to weapon.
1.25 for Fire and Lightning Runes.
1.5  for Thunder, Rage, Double-Strike, and Fire Lizard Runes.
The two major forms of damage: Physical damage, and magical damage, are affected by their respective damage formulas, which I'll document right here. First, we'll look at physical damage.

The formula is:
( a [ c ] - b ) ( d ) = total damage.

Here is a breakdown of an example attack formula.

Attacker has an attack power of 300. (a = 300)
Attacker has a Fury Rune. (c = 1.5)
Attacker has a Double-Strike Rune. (d = 1.5)
Attacker has a Rage Rune on weapon. (d = d * 1.5)
Defender has a defense power of 150. (b = 150)

The formula for this attack, then, is:
( 300 [ 1.50 ] - 150 ) ( 1.50 * 1.50 ) = 675 total damage.

Damage Equations: Magic
Variables Being Used
a Listed power of the spell.
b MAG stat of the caster.
c Elemental affinity of the caster with the spell.
d MDEF stat of the defender.
Now to magic damage.

The formula is:
( [ a * c ] + b ) - d = total damage.

Here is a breakdown of an example magic attack formula.

Spell is Flaming Arrows, which is listed at 60 DMG. (a = 60)
Caster has a +30% affinity with Fire. (c = 1.3)
Caster has a MAG stat of 150. (b = 150)
Defender has a MDEF stat of 100. (d = 100)

The formula for this magic attack, then, is:
( [ 60 * 1.30 ] + 150 ) - 100 = 128 total damage.

Critical Hits

(TECH + (LUCK / 2)) / 16 = Critical Hit %

Multiple Hits

(Char SPEED - Enemy SPEED) / 4 = Multi hit %

Hit Chance

(Attacker TECH - (Defender SPEED - 80) + HitBonus) = Hit%
Note: Bounded between 100% and 35%, ie you always have at least 35% chance to hit. HitBonus refers to items like Thunder God Garb and Thunder Amulet which raise Hit, but not TECH.

War Battle Technique Hit Rate:

Fire Spears: 50% chance to hit per target
Adlai's Explosion: 50% chance to hit per target
Luc's Wind Magic: 30% chance to hit
Jeane's Lightning: 2 distinct 30% chances to hit
Note: None of the above are affected by Atk or Def values at all.