Business studies formulas 2 Flashcards
Net assets
Non current assets + current assets - current liabilities - non current liabilities
Total equity
Share capital + retained profit
Current ratio
Current assets / current liabilities
Acid test ratio
(current assets - inventories) / current liabilities
Capital employed
Non current liabilities + total equity
Gearing
Non current liabilities / capital employed x 100
Return on capital employed
Operating profit / capital employed x 100
Working capital
Current assets - current liabilities
Average rate of return ARR
Net return per annum / capital outlay x 100
Net Present Value (NPV)
Present value - initial cost
Payback period
Amount required / new cash flow in year x 12
Capacity utilisation %
Current output / maximum possible output x 100
Labour productivity
Total output / Average number of employees
Labour retention %
Number of staff staying / average number of staff in post x 100
Labour turnover %
Number of staff leaving over a time period / average number of staff in post during the period x 100
