calculations Flashcards
gearing
(non current liabilities ÷ capital employed) x 100
Gross profit margin
(gross profit ÷ revenue) x 100
inventory turnover
cost of goods sold ÷ average inventory held
recievable days
(receivables ÷ revenue) x 365
payable days
(payables ÷ cost of sales) x 365
operating profit margin
(operating profit ÷ revenue) x 100
operating profit
gross profit - operating costs
current ratio
current assets ÷ current liabilities
Return On Capital Employed (ROCE)
operating profit ÷ capital employed
Return On Investment (ROI)
(profit from investment ÷ cost of investment) x 100
total contribution
contribution per unit x units sold
or
total revenue - variable costs
contribution per unit
selling price - variable cost per unit
Average rate of return (ARR)
(average annual return ÷ initial cost of project) x 100
market share
(sales of one business ÷ total sales in the market) x 100
profit for the year
operating profit + profit from other activities - net finance costs - tax
market capitalisation of a business
number of issued shares x current share price
capacity utilisation
(output ÷ maximum possible output) x 100
inventory turnover
cost of sales ÷ average inventories held
net gain
expected value - initial cost of decision
labour turnover
(number of staff leaving ÷ number of staff employed) x 100
break even output
Fixed costs ÷ contribution per unit
Income Elasticity of demand (YED)
% change in demand ÷ % change in income
Price Elasticity of Demand (PED)
% change in quantitu demanded ÷ % change in price
capital employed
total equity + non-current liabilities
market growth
(change in size of market ÷ original size of market) x 100
added value
sales revenue - costs of bought-in goods and services
labour productivity
output ÷ number of employees
varience
budgeted figure - actual figure
retention rate
(employees at the end of the period ÷ empoyees at the beginning) x100
cost of sales
opening stock + purchases - closing stock
operating profit before tax
operating profit + interest received - interest paid
operating profit after tax
operating profit before tax - tax
payback
- net cash flow for next year ÷ 12 = Average monthly return
- amount left to be paid ÷ monthly return = payback
ARR
step 1: make net cash flow and CCF table
step 2: calculate average anual profit (divide final CCF by years)
step 3: calculate ARR (divide average anual profit by initial investment figure
step 4: x100
NPV
step 1: Create net cash flow and CCF table
step 2: add a column for discount factor and NPV
step 3: Add discount factor values
step 4: multiply each net cash in flow by the discount factor
step 5: add up all NPV column to calculate total ROI
step 6: if the figure is negative then reject investment
sensitivity analysis
- calculate the distance between optimistic and pessimistic values
- the variable with the largest difference between the values is the one that has the most influence on overall outcome.
gross profit
revenue - cost of sales
