Business Formulae Flashcards

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1
Q

TC

A

TC = TFC + TVC

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2
Q

Sales Revenue

A

Sales revenue = Price x Quantity Sold

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3
Q

Gross Profit

A

Gross profit = Sales Revenue - Cost of goods sold

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4
Q

COGS

A

COGS = Opening Stock + Purchases - Closing Stock

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5
Q

Net Profit

A

Net Profit = Gross Profit - Expenses (Indirect or Fixed costs)

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6
Q

Equity

A

Equity = Share Capital + Retained Earnings (should equal net assets)

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6
Q

Net Assets

A

Net Assets = (Noncurrent Assets + Current Assets) - (Noncurrent Liabilities + Current Liabilities)

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7
Q

Annual Depreciation

A

Annual depreciation = (Purchase cost - Scrap value) / Lifespan

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8
Q

Depreciation per unit

A

Depreciation per unit = (Purchase Cost - Scrap Value) / Expected Number of units over lifetime

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9
Q

Depreciation expense

A

Depreciation expense = Depreciation per unit * Number of units produced (so far)

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10
Q

GPM

A

GPM = Gross Profit / Sales Revenue * 100

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11
Q

Net Profit Margin

A

Net Profit Margin = Profit before interest and tax / Sales Revenue * 100

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12
Q

ROCE

A

ROCE = Profit before Interest and Tax / Capital Employed * 100

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13
Q

Capital Employed

A

Capital Employed = Noncurrent Liabilities + Equity = Total Assets - Current Liabilities

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14
Q

Current Ratio

A

Current Ratio = Current Assets / Current Liabilities

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15
Q

Stock turnover ratio

A

Stock Turnover (times) = Cost of Goods Sold / Average Stock

15
Q

Acid (Quick) Ratio

A

Quick Ratio = (Current Assets - Stock) / Current Liabilities

16
Q

Gearing Ratio

A

Gearing Ratio = Noncurrent Liabilities / Capital Employed * 100

17
Q

Stock turnover (days)

A

Stock Turnover (days) = Average Stock / Cost of Goods Sold * 365

18
Q

Debtor days

A

Debtor Days = Debtors / Total Sales Revenue * 365

18
Q

Net cash flow

A

Net Cash Flow = Inflows of Cash - Outflows of Cash

18
Q

Average stock

A

Average Stock = (Opening Stock + Closing Stock) / 2

19
Q

Creditor days

A

Creditor Days = Creditors / Cost of Goods Sold * 365

20
Q

Working captial

A

Working Capital = Current Assets - Current Liabilities

21
Q

payback period

A

Payback Period = Initial Investment / Contribution per month (time period)

22
Q

Average Rate of return

A

Average Rate of Return = (Profit per year) / Initial Amount * 100

22
Q

Profit per year

A

Profit per year = Total Profit / Number of Profitable Years

23
Q

Condition for attraction

A

Condition for attraction ARR > Interest Rates AND Payback Period < Profitable Lifetime

24
Q

Discount factor

A

Discount factor = 1 / (Rate of Interest)^Time Period

25
Q

Net Present Value

A

Net Present Value = Sum of Present Values - Cost of Investment

26
Q

Variance

A

Variance = Actual Outcome - Budgeted Outcome

27
Q

Capacity utilisation

A

Capacity Utilisation = Actual Output / Productive Capacity * 100

27
Q

Labour productivity

A

Labour Productivity = Output / Labour Hours * 100

28
Q

Capital productivity

A

Capital Productivity = Output / Capital Hours * 100

29
Q

Productivity rate

A

Productivity Rate = Total Output / Total Input * 100

30
Q

Operating leverage

A

Operating Leverage = Total Contribution / Total Profit

31
Q

Free float

A

Free Float = Earliest start time of the next activity - the earliest start time of this activity - duration of this activity

31
Q

Total float

A

Total Float = Latest finish time - duration - earliest start time