calculations Flashcards
break-even
contribution per unit
(selling price per unit - variable costs per unit)
margin of safety
actual sales units - breakeven level of output
sales revenue
quantity sold x selling price
costs of goods sold
opening inventories + purchases - closing invetories
gross profit
sales revenue - costs of goods sold
profit/loss for the year
gross profit - expenses + other income
current assets
- owned by the business whose value can fluctuate on a regular basis.
- intended to be converted into cash in the short term.
e. g. inventory, trade receivables, prepayments
non-current assets
- an asset that will remain in the business for longer than 1 year.
- not intended o convert into cash in the short term.
e.g. tangible- machines, vehicles, buildings
intangibles- trade marks, brand names, goodwill
current liabilities
- short term debts
- should be paid back in under 12 months
e. g. overdrafts, trade payables, accruals
non-current liabilities
- due after more than one year
e. g. long-term bank loan, mortgage
net assets
(current assets + current liabilities) - (non-current assets + non-current liabilities)
= total assets - total liabilities
working capital
current assets - current liabilties
if a business has low working capital, then it does not have enough money to meet its current level of debt.
current ratio
current liabilities
liquid capital ratio
current liabilities
gross profit margin
gross profit
—————– x 100
revenue
