all equations Flashcards
ROCE
(operating profit/ capital employed) x 100
capital employed
current assets - current liabiliites
gross profit
revenue- cogs
cogs
opening inventory + purchases - closing inventory
gross profit margin
(gross profit/ sales revenue) x 100
operating profit margin
(operating profit/ sales) x 100
non-current asset turnvover ratio
sales/ non-current assets
average receivables collection period
(trade recievables/ credit sales) x 365
average payables payment period
(trade payables/ credit purchases) x 365
can use cogs instead of purchases
inventory holding period
( inventory/ cogs) x 365
net trade cycle
inventory holding period + recievables collection period - payables payment period
contribution per unit
SP-VC
total contribution
contribution per unit x number of units sold
contribution margin
(total contrubtion/ total revenue) x 100
break even units
FC/ SP - VC
profit using contribution
total contribution - FC
margin of safety
(actual units sold - break even units/ actual units sold) x 100
accounting rate of return
equation
(operating profit/ average capital employed) x 100
operating profit in long-term
equation
total profit/ no. of years of project
average capital employed in long-term
equation
cost + scrap value/ 2
operating profit long-term if you get given cash flow
equation
total cash - (cost- scrap)/ no. of years of project
Overheads
2.apportion indirect costs to cost centres
equation
size of section/ total size of org x e.g rent bill
overheads
3.reapportion service department costs to production departments
equation
hours of time used of section/ total hours worked by section x bill sharing out
add on labour
overheads
overhead absorption rate
equation
total overheads/ no. of hours worked = £… per hour
