Final Damage = ((Damage - DR) * (1 - Resistance / 100) * (1 - 2 * Absorb% / 100) - 2 * Absorb - ArmorSkill) * XvX * (1 - ES / 100)
Negative final damage means that you gain life.
Terms in the equations
Damage = Original damage dealt by the attacker
DR = Damage reduced by X (vs. physical damage) or Magic damage reduced by X (vs. fire, cold, lightning and magic damage)
Resistance = Resistance (the appropriate one vs. damage type) or Damage Reduced by X% (vs. physical damage)
Absorb% = Percentage absorb (the appropriate one vs. damage type)
Absorb = Direct absorb (the appropriate one vs. damage type)
ArmorSkill = Necromancer's Bone Armor (vs. physical damage) or Druid's Cyclone Armor (vs. fire, cold and lightning damage)
XvX = Unit Type Modification, see the table above.
ES = Sorceress's Energy Shield (vs. all damage types except poison)

by tommy gustafsson