component 1 formulas Flashcards
total revenue
= total quantity sold X selling price
profit
= total revenue- total costs
total costs
= fixed costs+ variable costs
break even
= fixed costs/ selling price- variable cost per unit
what is meant by break even
where total revenue = total costs
variable costs
variable cost per unit X quantity/ output
what are fixed costs
constant
total costs
= fixed costs+ variable costs
sales revenue
= selling price X quantity
contribution per unit
=selling price per unit- variable cost per unit
total contribution
= contribution per unit X number of units sold
OR
= total sales - total revenues
profit 2
total contribution- fixed costs
margin of safety
actual sales- break even level of sales
labour turnover
average staff leaving/ average number of staff employed X100
labour productivity
total output per period of time/ average number of employees per period of time
absenteeism
total number of staff absence days over a year/ total number of working days that should have been worked X100
whats the average staff turnover
15%
market share
sales of a business/ total sales in a market X 100
net cash flow
income- expenditure ( inflows- outflows)
opening balence
same as closing balence of previous month
closing balence
opening balence+ net cash flow
added value
sales revenue- cost of goods sold
cost of sales
opening inventories + purchases - closing inventories
gross profit
sales reveneue - cost of sales
net profit def
profit that belongs to the sole trader following a reduction of all expenses from the gross profit. the sole trader has to pay income tax on this profit
net profit formula
gross profit -expenses
gross profit margin
%=gross profit/sales revenue X100
net profit margin
%=net profit/ sales(rev) X100
turnover
COS +gross profit
gross profit margin def
measures the proportion of money left over from revenues after accounting for the cost of goods sold
If the Gori’s profit margin is 30% this means that the business’s cost of sales are 70% of its turnover because turnover equals cost of sales plus gross profit
Net profit Margin def
Measures how Much out of every pound of sales a company actually keeps in earnings
Operating profit margin
Operating profit/ SalesX100
variance
budgetted figure- actual figure
