business equations Flashcards
net cash flow =
inflows - outflows
closing balance =
net cash flow + opening balance
sales revenue =
price X quantity output
total variable costs =
variable cost per unit X no. units produced
total costs =
fixed costs + variable costs
average cost =
total cost
________
output
profit =
total revenue - total costs/sales
break even =
fixed costs
_______________________
selling price X variable cost
selling price =
fixed costs
_________
contribution
(unit) contribution =
selling price - variable costs
total contribution = (with revenue)
revenue - total variable costs
total contribution = (using unit contribution)
unit contribution X no. units sold
breakeven output =
fixed costs
____________
contribution
margin of safety =
sales volume - breakeven output
gross profit =
revenue - cost of sales
operating profit =
gross profit - operating expenses
net profit (profit for year) =
operating profit - interests
gross profit margin =
gross profit
_____________ X 100
sales revenue
operating profit margin =
operating profit
______________ X 100
sales revenue
net profit margin =
net profit
_____________ X 100
sales revenue
sales revenue =
no units sold X price
working capital =
current assets - current liabilities
current ratio =
current assets
_______________ X 100
current liabilities
ideal ratio = 1.5 : 1
acid test ratio =
current assets - inventories
________________________ X 100
current liabilities
ideal ratio = 1:1
