A-Level Business Formulas Flashcards
Absenteeism
(Number of days of absence/Total number of workdays ) ×100
Accounting rate of returns (ARR)
(Average annual profits/average investment) ×100
Acid Test Ratio
Liquid assests/Current liabilities
Annual depreciation
(Original cost of assests-Expected residual value)/Expected useful life of assets in years
Average inventory
(Inventory at the start of the year + inventory at the end of the year)/2
Average investment
(Initial capital cost + Residual capital value)/2
Capital employed
Non-current liabilities + issued shares + reserve (or Shareholde’ equity)
Costs of sales
(Opening inventory + Purchase) - Closing inventories
Current Ratio
Current assets/ Current liabilities
Dividend cover ratio
Annual Profits/Annul Dividends
Dividend per Share
Total annual dividends / Total number of issued shares
Dividend Yield Ratio
(Dovidend per share/ Market share price) ×100
Earnings per share
Annual profit/ Number of shares issued
Free Float
EST (next activity) -Duration - EST (this activity)
Gearing Ratio
(Non-current liabilities/Capital employed) × 100
Gross profit
Revenue - Cost of sales
Gross Profit Margin Ratio
(Gross profits/Revenue) ×100
Income elasticity of demand
%change in demand /%change in consumer income
Liquid Assets
Current assets - Inventories
Market Shares
(Sales of the business in a time period/ total market sales in the time period) × 100
Net book value
The current statement of financial position value of a non-current asset =Original cost less accumulated depreciation
Net realizable value
Value of existing inventory -cost of selling inventory
Operating profits margin ratio
(Operating profit/revenue) × 100
Additional months to payback
(Additional net cashflow needed/annuel cashflow of that year) ×12 months
Prices /Earning Ratio
Market Share Price /Earning per Share
Price Elasticity of Demand
Percentage change in quantity demanded/ Percentage change in price
Promotional Elasticity of Demand
%Change in Demand for the product /%Change in Promotional Spending
Rate of inventory turnover
Cost of sale/ Average inventory
Reserves
Shareholders’ Equity - Share capital
Return to capital employed ratio
(Operating profit/ capital employed) ×100
Total Float
LFT -duration -EST
Total revenue
Selling Price × Quantity sold
Trade payables turnover
(Trade payables/Credit purchases) x365
Trade receivables
(Trade receivables /Credit sales) x365
Working capital or Net current assests
Current Assests - Current liabilities
% change
[(Old value - new value)/old value] ×100
Labour turnover
(Number of departures/average number of employees) × 100
Labour productivity
Total output in a given time/ Total workers employed
