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Business > Business Calculations > Flashcards

Business Calculations Flashcards

1
Q

How do you calculate fixed costs?

A

Fixed costs + Variable costs

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2
Q

How do you calculate profit?

A

Total Revenue - Total Costs
OR
Total contribution - Fixed Cost

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3
Q

How do you calculate market capitalisation?

A

Number of Shares X Current share volume

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4
Q

How do you calculate sales revenue/turnover?

A

Selling price X Number of units sold

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5
Q

How do you calculate the expected value of a decision?

A
  • Two possible outcomes - A & B = (Pay-off of A X probability of A) + (Pay-off of B X probability of B)
  • N.B. Probability of A + Probability of B = 1.0
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6
Q

How do you calculate net gain within a decision tree?

A

Expected value - Initial cost of decision

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7
Q

How do you calculate market size volume?

A

The quantity of goods and services produced in a particular market over a period of time usually one year

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8
Q

How do you calculate market size?

A

The total sales revenue (from selling all of the goods and services) produced in a particular market over a period of time (usually one year)

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9
Q

How do you calculate 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

How do you calculate sales value?

A

The total sales revenue of a particular business over a period of time usually (one year)

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11
Q

How do you calculate market growth (%)?

A

(Change in size of market between years / Size of the market in year) X 100

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12
Q

How do you calculate sales growth (%)?

A

(Change in sales of product or business between years / Sales of product or business in year) x 100

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13
Q

How do you calculate market share %?

A

(Sales of one product OR brand OR business / Total sales in the market) x 100

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14
Q

How do you calculate price elasticity of demand?

A

(Percentage change in quantity demanded / Percentage change in price) x 100

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15
Q

How do you calculate added value?

A

Sales revenue - costs of bought-in goods and services

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16
Q

How do you calculate labour productivity?

A

Output per time period / Number of employees

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17
Q

How do you calculate unit costs?

A

Total costs of production / Number of units of output produced

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18
Q

How do you calculate capacity utilisation (%)?

A

Actual output in a given time period / Maximum possible output in a given time period

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19
Q

How do you calculate return on investment (%)?

A

Return on investment (£) / Cost of the investment (£)

20
Q

How do you calculate gross profit?

A

Sales Revenue - Cost of Sales

21
Q

How do you calculate profit from operations/ operating profit?

A

Sales Revenue - Cost of Sales - Operating Expenses

22
Q

How do you calculate profit for the year?

A

Operating profit + Profit from other activities - Net finance costs - Tax

23
Q

How do you calculate variance?

A

The difference between an actual and a budgeted figure.
* Favourable variance results in profits being higher than forecast
* Adverse variance results in profits being lower than forecast

24
Q

How do you calculate contribution per unit?

A

Selling price - Variable costs per unit

25
Q

How do you calculate total contribution?

A

Contribution per unit × Units produced or sold
OR
Total revenue - Total variable costs

26
Q

How do you calculate break-even output?

A

Fixed costs / Contribution per unit

27
Q

On a break even chart where can you find break- even output?

A

The level of output at which Total Revenue equals Total Costs

28
Q

On a break even chart where can you find the level of profit at a given level of output?

A

The vertical distance between the Total Revenue line and the Total Cost line

29
Q

How do you calculate margin of safety?

A

Actual level of output - Breakeven level of output

30
Q

How do you calculate gross profit margin (%)?

A

(Gross profit / Sales revenue) x 100

31
Q

How do you calculate profit from operations margin/ operating profit margin (%)?

A

(Operating profit / Sales revenue) x 100

32
Q

How do you calculate profit from the year margin?

A

(Profit for year / Sales revenue) x 100

33
Q

How do you calculate labour turnover (%)?

A

(Number of staff leaving during the year / Average number of staff employed by the business during the year) x 100

34
Q

How do you calculate employee retention rate (%) for a particular time period?

A

(Number of staff leaving during the year / Average number of staff employed by the business during the year) x 100

35
Q

How do you calculate employee costs as percentage of turnover?

A

(Employee costs / Sales turnover) x 100

36
Q

How do you calculate labour costs per unit?

A

Labour costs / Units of output

37
Q

How do you calculate the capital employed?

A

Total equity + non-current liabilities

38
Q

How do you calculate return on capital employed (ROCE) (%)?

A

(Operating profit / Total equity + non-current liabilities) x 100

39
Q

How do you calculate current ratio?

A

Current assets / Current liabilities

40
Q

How do you calculate gearing %?

A

(Non-current liabilities / Total equity + non-current liabilities) x 100

41
Q

How do you calculate payable days?

A

(Payables / Cost of sales) x 365

42
Q

How do you calculate receivable days?

A

(Receivables / Sales revenue) x 365

43
Q

How do you calculate inventory turnover?

A

Cost of goods sold / Average inventories held

44
Q

How do you calculate the average rate of return %?

A

(Net return from the project (£) or number of years / Initial cost of the project (£)) x 100

45
Q
A

Business (30 decks)

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