Business Formula - Finance Flashcards
1
Q
ROI
A
(Operating profit / Capital Invested) x100
2
Q
Gross Profit
A
Sales revenue - cost of sales
3
Q
Operating Profit
A
Gross profit - expenses
4
Q
Profit for the year
A
Operating profit - interest and taxation
5
Q
Gearing
A
(Debt / Total Long-term funding) x 100
6
Q
Breakeven
A
Fixed costs / contribution
7
Q
Total contribution
A
(Selling price - variable cost) x units sold
8
Q
Gross profit margin
A
(Gross profit margins / Revenue) x 100
9
Q
Operating profit margin
A
(Operating profit / Revenue) x 100
10
Q
Profit for the year margin
A
(Profit for the year / Revenue) x 100
11
Q
Margin of safety
A
Actual output - breakeven output
12
Q
Variance
A
Actual - budget
13
Q
PED
A
% change in demand / % change in price
14
Q
YED
A
% change in demand / % change in income
15
Q
PED ranges
A
Price inelastic => 0 to -1
Price elastic => -1 or less
