Business Formulas Flashcards
PED
% change in Quantity Demanded/% Change in Price
YED
% change in Quantity Demanded/% Change in Income
Market Share (%)
Business Sales/Market Sales x100
Market size
Total value of business sales
(From a %) = Known value/100
Market Growth (%)
Difference/Original X100
Total Costs (£)
Fixed Costs + Total Variable Costs
Total Variable Costs
Variable Cost Per Unit x Number of Units
Revenue (£)
Selling Price x Quantity Sold
Profit (£)
Revenue - Total Costs
Break Even (Units)
Fixed Costs/Contribution
Contribution (per unit)
Selling Price per unit - Variable Cost per unit
Total Contribution
Total Revenue - Total Variable Costs
OR
Contribution per unit x Number of Units
Margin of Safety
Actual Level of Output - Break Even Point
Net Cash Flow (£)
Inflows - Outflows
Budget Variance (£)
Budgeted - Actual
Gross Profit (£)
Sales Revenue - Cost of Sales
Net Profit (£)
Sales Revenue - Cost of Sales - Expenses
OR
Gross Profit - Expenses
Gross Profit Margin
Gross Profit/Revenue
X100
Net Profit Margin
Net Profit/Revenue
X100
Labour turnover (%)
Number of Leavers/Average Number of Employees
X100
Labour productivity
Output per time period/number of employees
Added Value (£)
Value of Output - Value (Costs) of Inputs
[Selling price - cost of raw materials]
Capacity Utilisation
Actual Output/Maximum Possible Output
X100
Lead Time (Time)
Time Difference between re-order quantity and stock increase
Re-Order quantity
Increase in stock level when delivery received
Moving Average
Previous Month + Current Month + Next Month/3
Working Capital
Current Assets - Current Liabilities
Capital Employed
Shareholder funds + Non current liabilities
Depreciation
Historical Cost - Redsidual Value (resale value)/ Useful life of asset (life span)
ROCE
Net Profit before Tax/Shareholder funds + non current liabilities
Current Ratio
Current Assets/Current Liabilities
Acid Test
Current Assets - Stock/Current Liabilities
Gearing
long-term liabilities/capital employed
X100
Decision Tree:
Expected Value
(Each Probability X Each Outcome) Added together
Decision Tree:
Net Gain
Expected Value – Initial Cost
CPA: EST
Previous EST + Previous Activity Duration
(Work from left to right)
(Choose biggest outcome if more than one route)
CPA: LFT
Previous LFT – Following Activity Duration
(Work from right to left)
(Choose smallest outcome if more than one route)
CPA: FLOAT
LFT – Duration -EST
Payback
(Number of Full years) &
Amount needed in final year/Amount getting in final year
X (12Months)
Average Rate of
Return
Average Annual Profit/COST OF INVESTMENT
x100
Net Present
Value
- Multiply each year’s income by its discount rate
- Add them together
- Deduct initial cost
Contribution
(Special Orders)
Selling Price Per Unit – Variable Cost Per Unit = Contribution Per
Unit
Contribution Per Unit x Units Sold = Total Contribution
