Business formulas Flashcards
Gross profit margin
Gross profit / turnover x100
Gross profit
Revenue - Cost of sales
Operating profit
Sales revenue - Total costs
Operating profit margain
Operating profit / Total revenue x100
Profit for the year
Operating profit - All costs
Contribution per unit
Selling price - Variable costs per unit
Total contribution
Contribution per unit x Quantity
Total revenue - total variable costs
Breakeven
Fixed costs / Contribution per unit
Margin of safety
Actual output - Breakeven point
Profit
Total revenue - total costs
Sales growth
Sales this year - Sales last year / Sales last year x100
Market growth
New market size - Old market size / Old market size x100
Market share
Sales of a product / Total sales in market x100
Price elasticity of demand
% change in quantity demand / % change in price
Income elasticity of demand
% change in quantity demand / % change in income
Labour costs per unit of output
Total labour costs / Total output x100
Absenteeism
Number of staff absent during a certain period of time / number employed during certain period of time x100
OR
Number of days taken off with unauthorised absence during a certain period / Total days worked by workforce over the certain period of time x100
Unit cost
Total cost / Units output
Fixed costs
Total costs - Variable costs
Total costs
Fixed costs + Variable costs
Labour productivity
Output / Number of employees at work
Capacity utilisation
Output / Capacity x100
Labour turnover
Number of leavers per year / Average number of employees per year x100
Labour renention
Number of employees with one or more years service / Overall workforce x100
Output per employee
Output period (units) / Number of employees at work
Net cash flow
Inflows - Outflows
Opening balance
Last month’s closing balance
Closing balance
Opening balance + Net cash flow
ROCE
Operating profit / (Total equity + Non-current liability)
Current ratio
Current assets / Current liabilities
Gross profit margin
Gross profit / Sales revenue x100
Operating profit margin
Operating profit / Sales revenue x100
Working capital
Current assets - current liabilities
Net assets
Net current assets + non-current assets - non-current liabilities
Net current assets
Current assets - current liabilities
Labour cost per unit
Labour costs / Units of output
Break-even level in sales revenue
Break-even output x selling price
Market capitilisation
Number of issued shares x share price
ARR
Average net return / Investment x100
Payback
Amount invested / Annual net return
Net gain
Expected value - Initial cost of decision
Inventory turnover
Cost of goods sold / Average inventories held
