Being an action RPG, damage is pretty critical in Depths of Peril.  Here's how damage is calculated in the game: 

Damage = ( BaseDamage * Multipliers ) + ExtraDamage

where: 

• BaseDamage = 1 to 4 + damage from weapon
• Multipliers come from strength, current effects, passive skills, and skill used in the attack
• All multipliers are added together before the multiply
• If multplier is greater than 0, then 1.0 + multiplier is really used in the equation
• If multiplier is less than 0, then 1.0 / ( 1.0 - multiplier ) is used in the equation
• Some multipliers only effect certain types of damage, like strength only boosts physical damage
• If you get a crushing blow, it will automatically use the max value
• If you get a critical hit, it will multiply the final value by 2

Monsters and recruits work like this also, but monsters have a higher natural base damage and recruits have some hidden multipliers (for balance reasons).