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AQA A level Business > Business Formulas > Flashcards

Business Formulas Flashcards

1
Q

What is the formula for revenue(sales or turnover)?

A

Revenue (Sales or Turnover) =

Selling price per unit × Number of units sold

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2
Q

What is the equation for total variable cost?

A

Variable costs (Total variable costs) = Variable cost per unit × Number of units sold

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3
Q

What’s the equation for total costs?

A

Total costs =

Fixed costs + Variable costs

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4
Q

What are the equations for profit?

A

Total revenue − Total costs
OR
Total contribution − Fixed costs

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5
Q

What’s the equation for market capitalisation?

A

Market capitalisation of a business = Number of issued shares × Current share price

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6
Q

What’s the formula for the expected value of a decision with 2 possible outcomes e.g. A&B?

A

Expected value of a decision with two possible outcomes eg. A & B = (Pay-off of A × probability of A)+ (Pay-off of B × probability of B)

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7
Q

What’s the formula for net gain?

A

Net gain =

Expected value − Initial cost of decision

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8
Q

What’s the formula for market share?

A

Market share(%)= (sales of 1 product or brand business/ total sales in a market) *100

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9
Q

What’s the formula for market growth?

A

Market growth (%) = (change in the size of the market over a period of time/ original size of the market) *100

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10
Q

What’s the formula for added value?

A

Added value= Sales revenue- cost of bought-in goods and services

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11
Q

What’s the formula for labour productivity?

A

Labour productivity = (Output over a time period/ Number of employees)

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12
Q

What’s there formula for unit cost(average cost)?

A

Unit cost = total cost/ number of units of output

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13
Q

What’s the formula for capacity utilisation?

A

(Actual output/maximum possible output)*100

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14
Q

What’s the formula for return on investment?

A

Return on investment = (profit from the investment / cost of investment )*100

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15
Q

What’s the formula for gross profit?

A

Revenue- cost of sales

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16
Q

What’s the formula for operating profit?

A

Gross profit - operating expenses

17
Q

What’s the formula for profit of the year?

A

Operating profit+ profit from other activities - net finance costs - tax

18
Q

What’s the formula for gross profit margin(%)?

A

(Gross profit/ revenue )*100

19
Q

What’s the formula for operating profit margins?

A

(Operating profit/ revenue)*100

20
Q

What’s the formula for variance?

A

Budgeted variance- actual variance

21
Q

What’s the formula for contribution per unit?

A

Selling price- variable cost per unit

22
Q

What are the formulas for total contribution?

A

Total contribution = Contribution per unit × Units sold
Total contribution =
Total revenue − Total variable costs

23
Q

What’s the formula for break even output?

A

Fixed cost per unit/ contribution per unit

24
Q

What’s the formula for margin of safety?

A

Actual level of output- break even level of output

25
Q

What’s the formula for labour turnover?

A

(Number of staff leaving / number of staff employed by the business) *100

26
Q

What’s the formula for employee retention rate?

A

Employee retention rate (%) for a particular time period =
(Number of employees who remained with the business for the whole period of time / number of employees at start of time period)×100

27
Q

What’s the formula for employee costs as a percentage of turnover?

A

(Employee costs / turnover)*100

28
Q

What’s the formula for labour costs per unit?

A

(Labour costs/ units of output)

29
Q

What’s the formula for return in capital employed (ROCE)?

A

(Operating profit/ capital employed) *100

“Where captain employed is total equity + non current liabilities

30
Q

What’s the formula for current ratio?

A

Current assets / current liabilities

31
Q

What’s the formula for gearing?

A

(Non current liabilities / capital employed)*100

“ where capital employed is total equity + non current liabilities

32
Q

What’s the formula for payable days?

A

(Payables/ cost of sales) * 365

33
Q

what’s the formula for receivable days?

A

(receivables/revenue)*365

34
Q

what’s the formula for inventory turnover?

A

(cost of sales/average inventories held)

35
Q

whats’s the formula for average rate of return?

A

(average annual return/initial cost of project)*100

36
Q

what’s the formula for net present value (NPV)?

A

net present value (NPV) = present value - cost of investment

37
Q

how do you calculate present value?

A

discount factor * expected return

38
Q

how do you calculate Average Rate of return?

A

total return/ number of years

-if its as a percentage then multiply it by 100

AQA A level Business (13 decks)

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