Calculations Flashcards
revenue
income earned by a business from sales
revenue calculation
number of sales x price per unit
costs
expenses a business pays
total costs calculation
fixed costs + variable costs
variable costs calculation
unit x amount
variable
changes directly depending on output
net income calculation
income - costs
gross profit calculation
total revenue / sales - costs
net profit calculation
gross profit - costs
profit
amount of money a business makes when taking into account costs
profit calculation
total revenue - total costs
average price per unit
gives business an idea on what prices should change
average price per unit calculation
total costs / output
interest calculation
rate x loan size
break even
amount of sales when revenue is equal to total costs
margin of safety
amount of output that can fall until business reaches break even level
margin of safety calculation
actual output - break even point
net cash flow calculation
cash inflow - cash outflow
