Business Calculations Flashcards
How do you calculate acid test ratio
Current assets - inventory
/
Current liabilities
How do you calculate total equity
Equity = retained profits + share capital
Total equity = net assets
How do you calculate income elasticity of demand ? (YED)
% change in quantity demanded
/
% change in income (Y)
What are non current liabilities?
Non current liabilities measures the value of expenses to be paid by a business over a period of time longer than 12 months (1year) eg. A mortgage or long term loan
How do you calculate gross profit?
Gross profit= total revenue - cost of sales
How do you calculate profit for the year(net profit)
Net profit = operating profit - interest
How do you calculate Total contribution?
Total contribution = cont per unit X no. Of units
How do you calculate net cash flow?
Net cash flow = total cash inflows - total cash outflows
How to calculate gross profit margin ?
GPM (%) = gross profit
/ X100
Total revenue
How to calculate total costs
Total costs = total fixed costs + TVC
Where do you find the break even point
Break even point, revenue = total costs
How do you calculate TVC?
TVC = VCPU X no. Of units
how to calculate VCPU ?
VCPU = TVC % no. Of units
How to calculate net cash flow ?
Net cash flow = cash inflows - cash outflows
How to calculate the closing balance?
Closing balance= opening balance + net cash flow
How to calculate operating profit ?
Operating profit = gross profit - operating costs( overheads)
% change
% change = new-old
/ X100
Old
How to calculate the MOS (margin of safety)
MOS = actual output level - break even output level
How to calculate market share ? (%)
Market share = total value of sales of a business / total value of sales of the market X100
What are non current assets?
Non- current assets measure the value of assets which business is expected to have for longer than a period of 12 months (1 year ) eg. Land, property and equipment
How to calculate selling price per unit?
Selling price per unit= revenue / no. Of units
What are current liabilities?
Current liabilities measures the value of expenses which need to be paid by a business within a period of 12 months (1year) eg. Rent, electricity
How to calculate operating profit margin (%)?
OPM = operating profit / revenue X100
Net profit/ profit for the year margin
NPM = NP/revenue X100
How do you calculate capacity utilisation (%)?
Capacity utilisation = current output level / maximum possible output level X100
How do you calculate profit variance ?
Profit variance = actual profit figures - budgeted profit figures
How to calculate break even?
Break even = total fixed costs/ contribution per unit
what are non-current assets?
non-current assets otherwise known as fixed assets measures the value of assets which a business has purchased and is expected to have possession of/use for over a year (a period of 12 months) eg. land,property and equiptment are examples of non-current assets
what are current liabilities?
current liabilities measures the value of expenses to be paid by a business within a period of 12 months(1 year) eg. rent,electricity,or telephone bills
how do you calculate profit for the year (net profit margin)?
NPM= net profit/ revenue X100
how do you calculate profit variance?
profit variance= actual profit figure - budegetted profit figure
how do you calculate total equity/ net assets ?
net assets = current and non- current assets - current and non-current liabilities
what are current assets ?
current assets measures the value of assets which will take a business 12 months (1 year) to turn into cash in the bank eg. inventory,stock and recievables are examples of current assets
how do you calculate contribution per unit?
contribution per unit = selling price per unit - VCPU
how do you calculate PED (price elasticity of demand)?
PED = % change in qty demanded/ % change in price
how do you calculate revenue?
revenue = price X quantity
current ratio formula
current ratio = current assets/current liabilities
eg. 1:1.5
formula for calculating profit or loss
profit/loss = revenue - total costs
what is the formula for working capital/net current assets?
working capital
/ net current = current assets-current
assets liabilities
