Business formulae Flashcards
Revenue
Selling price x number of units sold
Total variable costs
Fixed costs + variable costs
Profit
Revenue - total costs
Interest on Loans
(total repayment - borrowed amount)/(borrowed amount) * 100
Break even (units)
(fixed costs)/(selling price - variable cost per unit)
Break even (sales/ revenue)
Break even units * sales price
Margin of safety
actual budgeted sales (or output) - break even sales (or output)
Net cash flow
Total cash inflows (receipts) - total cash outflows (total payments)
Opening balance
closing balance of previous period
Closing balance
Opening balance + net cash flow
Lead time
Delivery date - date stock is reordered
Gross profit
Sales revenue - cost of sales
Gross profit margin (%)
(gross profit/revenue) * 100
Net profit
Gross profit - other operating expenses (often tax) and interest
Net profit margin (%)
(Net profit/sales revenue) * 100
Average rate of return
(Average annual profit/cost of investment) * 100
Average annual profit
Total profit/number of years
Percentage change
(difference in figures or change/ original figure) * 100
Average
Total of all individual values/the number of values in the set
Market share
(sales of business or product/total sales in the market) * 100
Break even point
On a break even chart where: total revenue = total costs and the business makes neither a profit or a loss.
