Business formulas Flashcards
Total costs
Total fixed costs + total variable costs
Variable costs
Cost of one unit x quantity produced
Revenue
Price x quantity
Break-even
Break-even point in units = fixed costs / (sales price - variable costs)
Margin of safety
Actual or budgeted sales - break-even savings
Interest (on loans) in %
(Total repayment - borrowed amount) / borrowed amount
x100
Net cash flow
Cash inflows (receipts) - cash outflows in a given period (payments)
Opening balance
Closing balance of the previous month
Closing balance
Opening balance + net cash flow
Profit
Profit/loss = total revenue – total costs
Gross profit
Sales revenue - total costs
Net profit
Gross profit - Other operating expenses and interest
Net profit margin (%)
Net profit / sales revenue
x100
Average rate of return (%)
Average annual profit (= total profit / number of years)
/ cost of investment
x100
Percentage growth
Increase in size / original size
x100
