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AQA A-Level Business > All Calculations > Flashcards

All Calculations Flashcards

1
Q

Variable costs

A

Output x Variable costs per unit

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2
Q

Total costs

A

Variable costs + Fixed costs

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3
Q

Revenue

A

Quantity sold x Average selling price

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4
Q

Profit

A

Total revenue - Total costs OR
Total contribution - Total costs

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5
Q

Market Capitalisation

A

Current share price x Number of shares sold

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6
Q

Net Gain

A

Expected value - Cost of decision

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7
Q

Expected Value

A

(Expected value of a decision with two possible outcomes)
(Pay-Off of A x Probability of A) + (Pay-Off of B x Probability of B)
Probability of A + Probability of B = 1

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8
Q

Market Growth

A

(Market size in year - Market size of previous year) / Original market size x100

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9
Q

Sales Volume

A

The quantity of goods and services produced by a particular business over a period of time (usually one year).

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10
Q

Sales Value

A

The total sales revenue of a particular business over a period of time (usually one year).
Volume x Selling price

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11
Q

Sales Growth

A

Change in market sales of product or business between two years / Original market sales of product or business x100

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12
Q

Market share

A

Sales of one product or brand or business / Total sales in market x100

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13
Q

Price Elasticity of Demand (PED)

A

% Change in quantity demanded / % Change in price

Price inelastic demand has a coefficient in the range 0 to -1
Price elastic demand has a coefficient in the range -1 to -∞

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14
Q

Income Elasticity of Demand (YED)

A

% Change in quantity demanded / % Change in income

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15
Q

Unit Costs

A

Total costs of production / Total of units of output produced

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16
Q

Labour Productivity

A

Output per period / Number of employees per period

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17
Q

Capacity

A

Maximum level of production

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18
Q

Capacity Utilisation

A

Actual output / Maximum possible output x100

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19
Q

Variance

A

Actual - Budget

Favourable variance results in profits being higher than forecast.

Adverse variance results in profits being lower than forecast.

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20
Q

Contribution

A

Selling price per unit - Variable costs per unit

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21
Q

Total Contribution

A

Contribution per unit x Number of units sold

Total revenue - Total variable costs

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22
Q

Breakeven

A

Fixed costs / Contribution per unit

Breakeven output = Where total revenue equals total costs

Profit = Distance between total revenue line and total costs line

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23
Q

Margin of Safety

A

Actual output - Breakeven output

24
Q

Gross Profit

A

Sales Revenue - Cost of sales

25
Gross Profit Margin
Gross profit / Sales revenue x100
26
Operating/Net Profit
Gross profit - expenses
27
Operating/Net Profit Margin
Operating/Net profit / Sales revenue x100
28
Profit for the year margin
Profit for the year / Sales revenue x100
29
Return on Investment (%) (ROI)
Return on investment / Cost of investment x100 Operating profit / Capital employed x100
30
Net Cash Flow
Total inflows - Total outflows
31
Closing Balance
Opening balance + Net cash flow
32
Employee costs as a % of turnover
Employee costs / Sales revenue x100
33
Labour Productivity
Output per period / Number of employees per period
34
Labour costs per unit
Total labour costs / Total units of output x100
35
Labour Turnover
Number of employees leaving over a given period / Average number employed over a given period x100
36
Retention Rate
Number of employees with one or more years' service / Overall employee numbers x100
37
Current Assets
Inventories + Receivables + Cash and other cash equivalents
38
Working Capital or Net Current Assets
Current assets - Current liabilities
39
Net Assets
Non-current assets + Working capial - Non-current liabilities
40
Assets Employed
(Capital employed) Net current assets + Non-current assets
41
Total Equity
Share capital + Reserves
42
Capital Employed
Total equity + Non-current liabilities
43
Profit before Tax
Operating profit + Finance income - Finance costs
44
Profit for the Year
Profit before tax - Taxation
45
ROCE (Return on Capital Employed)
Operating profit or profit before tax / Total equity + Non-current liabilities x100 Where total equity + non current liabilities = capital employed
46
Current Ratio
Current assets / Current liabilities The current ratio is a simple measure that estimates whether the business can pay debts due within one year out of the current assets As a ratio of assets to liabilities. Favourable is 1.5-2:1 A low current ratio of less than 1.0 might suggest that the business is not well placed to pay its debts. Above 2 suggests inefficient use of assets.
47
Gearing
Non-current liabilities / Total equity + Non-current liabilities x100 Where total equity + non current liabilities = capital employed As a % 25% is low, 50% is high
48
Payables Days
Payables (Creditors) / Cost of sales x100
49
Receivables Days
Receivables (Debtors) / Annual revenue x365 Desirable for receivables days to be lower than payables days.
50
Inventory Turnover
Cost of goods sold / Average inventories held
51
Concentration Ratio
Add up the market share of a specific number of businesses in that market e.g. the top 3.
52
Payback
Add the annual returns from an investment until the cumulative total equals the initial cost.
53
Average rate of return (%) (ARR)
(Total net return or surplus from a project / Number of years = Average annual profit) / Initial cost x100
54
Market Size (Volume
The quantity of goods and services produced in a particular market over a period of time (usually one year).
55
Market Size (Value)
The total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time (usually one year).
56
Added Value (value added)
Sales revenue - Costs of bought in goods and services

AQA A-Level Business (7 decks)

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