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Revision > Business finance > Flashcards

Business finance Flashcards

1
Q

What is the equation for ‘Break-even’? (units)

A

Fixed costs / contribution

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2
Q

What is the equation for the ‘Mark-up’?

A

Gross profit / cost of goods sold X100

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3
Q

What is the equation for ‘Total Contribution’?

A

Selling price per unit - variable costs per unit

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4
Q

What is the equation for the ‘Reducing balance depreciation’?

A

Net book value X percentage rate

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5
Q

What is the equation for ‘Net book value’?

A

Costs - depreciation

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6
Q

What is the equation for ‘Total Revenue’?

A

Selling price X quantity sold

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7
Q

What is the equation for the ‘Sales revenue’?

A

Selling price X quantity sold

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8
Q

What is the equation for ‘Trade receivable days’?

A

(Trade receivables / credit sales) X365

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9
Q

What is the equation for the ‘Net current assets’?

A

Current assets - current liabilities

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10
Q

What is the equation for the ‘Gross profit’?

A

Sales revenue - direct costs

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11
Q

What is the equation for ‘Profit’?

A

Total revenue - total costs

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12
Q

What is the equation for the ‘Gross profit margin’?

A

Gross profit / sales revenue X100

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13
Q

What is the equation for the ‘Profit margin’?

A

Profit / revenue X100

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14
Q

What is the equation for ‘Trade payable days’?

A

(Trade payables / credit purchases) X365

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15
Q

What is the equation for ‘Total costs’?

A

Fixed costs + variable costs

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16
Q

What is the equation for ‘Net cash flow’?

A

Total income - total expenditure

17
Q

What is the equation for ‘Liquid capital ratio’?

A

(Current assets - inventory) / current liability

18
Q

What is the equation for ‘Current ratio’?

A

Current assets / current liabilities

19
Q

What is the equation for ‘Inventory turnover’?

A

(Average inventory / cost of sales) X365

20
Q

What is the equation for ‘Profit’? (using contribution)

A

Contribution per unit X margin of safety

21
Q

What is the equation for the ‘Margin of safety’? (value)

A

Margin of safety (units) X selling price

22
Q

What is the equation for the profit/loss for the year?

A

Gross profit - (expenses + other income)

23
Q

What is the equation for ‘Margin of safety’? (units)

A

Actual sales - break-even point

24
Q

What is the equation for the ‘Net assets’?

A

Non current assets + net current assets - non current liabilities

25
Q

What is the equation for ‘Closing balance’?

A

Opening balance + net cash flow

26
Q

What is the equation for the ‘Return on capital employed’?

A

Profit / capital employed X100

27
Q

What is the equation for the ‘Straight line depreciation’?

A

(Original price - scrap value) / estimated useful life of asset

28
Q

What is the equation for the ‘Cost of goods sold’?

A

(Opening inventory + purchases) - closing inventory

29
Q

What is the equation for ‘Contribution per unit’?

A

Selling price - variable cost

30
Q

What is the equation for ‘Capital employed’?

A

Opening capital + profit for the year - what you’ve drawn out

31
Q

What is the equation for ‘Break-even’? (sales value)

A

Break-even X selling point

32
Q

What is an advantage and disadvantage for cash?

A

Ad: No security breaches, no overspending, easy to track expenses
Dis: You can easily lose it, doesn’t gain interest, doesn’t come with a zero fraud liability guarantee

33
Q

What is an advantage and disadvantage for a credit card?

A

Ad: Can build credit, protection against credit card fraud
Dis: High interest rates if not paid in full, fees for late payments, annual fees

34
Q

What are 2 inflows which could be recorded in a cash flow forecast?

A

Cash sales, credit sales, rent received, bank interest, loan

35
Q

State 2 examples of intangible capital expenditure

A

Patent, copyright, goodwill, logos

Revision (3 decks)

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