Business revision Flashcards
Gross profit
Revenue - cost of sales
Gross profit margin
Gross profit divided by sales revenue X 100
Operating profit
Gross profit - other operating expenses
Operating profit margin
Operating profit divided by revenue x100
Net profit
Total revenue - total expenses
Net profit margin
Net profit divided by revenue X 100
Profit for the year
Total revenue- total expenses
Current ratio
Current assets
———————— = ratio
Current liabilities
Acid test ratio
Current assets - stock
———————————
Current liabilities
Gearing
Non current liabilities
——————————— X 100
Capital employed
Breakeven
Fixed Costs / Contribution per unit (Selling price per unit - Variable cost per unit)
Margin of Safety
Current output - Breakeven point
Working capital
Current assets- current liabilities
Capacity utilization
Current output
————————— X 100
Maximum possible output
Capital employed
Total assets - current liabilities
