AQA Business Formulae Flashcards
Price Elasticity of Demand
% Change in Quantity Demand ÷ % Change in Price
Income Elasticity of Demand
% Change in Quantity Demanded ÷ % Change in Income
Re-Order Level
Lead Time x Average Daily Usage + Buffer Stock Level
Payables Days
(Payables ÷ Cost of Sales) x 365
Receivables Days
(Receivables ÷ Revenue) x 365
Inventory Turnover
Cost of Sales ÷ Average Inventories Held
Average Rate of Return (%)
[Average Annual Return (£) ÷ Initial Cost of Project (£)] x 100
Current Ratio
Current Assets ÷ Current Liabilities
Gearing (%)
(Non-Current Liabilities ÷ (Total Equity + Non Current Liabilities)) x 100
Return on Capital Employed (ROCE)
(Operating Profit ÷ (Total Equity + Non-Current Liabilities)) x 100
Labour Costs per Unit
Labour Costs ÷ Units of Output
Employee Costs as a % of Turnover
(Employee Costs ÷ Turnover) x 100
Labour Turnover (%)
(Number of Staff Leaving ÷ Number of Staff Employed) x 100
Revenue
Selling Price x Units Sold
Variable Costs
Variable Costs per Unit x Units Produced or Sold
Total Costs
Variable Costs + Fixed Costs
Profit
Total Revenue - Total Costs
OR
Total Contribution - Fixed Costs
Market Capitalisation
Number of Issued Shares x Current Share Price
Net Gain
Expected Value - Initial Cost of Decision
Expected Value of a Decision with Two Possible Outcomes
A & B =
(Pay-Off of A x Probability of A) + (Pay-Off of B x Probability of B)
Market Growth (%)
(Change in Size of Market ÷ Original Size of Market) x 100
Market Share (%)
(Sales of One Product OR Business OR Brand ÷ Total Sales in the Market) x 100
Added Value
Sales Revenue - Cost of Brought-in Goods or Services
Labour Productivity
Output Over a Time Period ÷ Number of Employees
Unit Costs
Total Costs ÷ Number of Units Output
Capacity Utilisation
(Actual Output ÷ Maximum Possible Output) x 100
Return on Investment (ROI)
(Profit from Investment (£) ÷ Cost of the Investment (£)) x 100
Gross Profit
Revenue - Costs of Goods Sold
Operating Profit
Gross Profit - Operating Costs
Profit for the Year
(Operating Profit + Profit from Other Activities) - (Net Finance Costs + Tax)
Gross Profit Margin (%)
(Gross Profit ÷Revenue) x 100
Operating Profit Margin (%)
(Operating Profit ÷ Revenue) x 100
Profit for the Year Margin (%)
(Profit for the Year ÷ Revenue) x 100
Variance
Budgeted Figure - Actual Figure
Contribution per Unit
Selling Price - Variable Costs per Unit
Total Contribution
Contribution per Unit x Units Sold
OR
Total Revenue - Total Variable Costs
Break-Even Output
Fixed Costs ÷ Contribution per Unit
Margin of Safety
Actual Level of Output - Break-even level of output
