Calculations Flashcards
Added value
difference between the cost of purchasing raw materials and the price for which the finished good is sold for.
market share
Number of products sold by the business/ total market sales * 100
margin of safety
The difference between output level and break even output
Closing balance
net cash flow + opening balance.
Breakeven formula
Break-even Output = Fixed Costs divided by the Contribution Per Unit.
Revenue
Total Revenue = Quantity of Units Sold x Selling Price
Profit
Revenue- costs
contribution
selling price - variable costs
Margin of safety
actual sales – break-even
Capital productivity
Capital productivity = Output / Capital employed
Reorder level
Reorder level = average demand × lead time
Capacity utilisation
Actual output/max possible output x 100
Net assets
((Total Current Assets + Total Fixed Assets) - (Total Current Liabilities + Long Term Liabilities))
Capital employed
Shareholders capital+ retained profit+ long term liabilities
Or
Shareholder funds + long term liabilities
Depreciation
Asset cost- residual value/ useful life of asset
ROCE
Net profit/(shareholder funds + long term liabilities) x100
PED
%change in quantity demanded / %change in price
Percentage change
(New figure-old figure) /old figure x100
Working capital
Current assets- current liabilities
Current ratio
Current assets/ current liabilities : 1
Acid test ratio
(Current assets- stock)/ current liabilities:1
Gearing ratio
Long term liability/ capital employed x100
Shareholder’s capital
aka Shareholder’s funds
Share Capital + reserves
Payback period
Calculate cumulative cash flow
Then, divide cash flow per year in the remaining month by 12
Then, divide amount outstanding by the monthly cash flow
ARR
Average profit per annum/Initial investment cost x100
Discounted cash flow
aka Net Present Value
Multiply each annual cash flow by the discount factor
then, add all years together to get Total Present Value
then, subtract the initial cost to get the Net Present Value
then,
Net Present Value/ number of years then, divide by the initial cost and x 100.
Index numbers
Value in period/Value in base period x100
Cost benefit analysis
Social benefit -social cost
Social benefit
Private + external benefits
Social costs
Private costs + external costs
