Equations Flashcards
YED =
% Δ in quantity demanded
—————————————
% Δ in income
PED =
% Δ in quantity demanded
——————————————
% Δ in price
EV (Variation) =
Final Payoff x Probability
EV (Course of action)
EV1 + EV2 etc
Net Gain =
EV (course of action) - Cost (course of action)
Market Growth =
Market size (new) - Market size (old)
——————————————————— x 100
Market size (old)Sales Growth =
Sales (new) - Sales (old)
—————————————— x 100
Sales (old)
Market Share =
Business Sales
———————— x 100
Market Size
Average Unit Cost
Total Costs
——————
Units Sold
Labour Productivity =
Output ÷ Employees
Capital Productivity =
Revenue ÷ Non-current assets
Capacity Utilisation =
Actual Output
——————— x 100
Max Output
Gross Profit Margin =
Gross Profit
—————— x 100
Revenue
Operating Profit Margin =
Operating Profit
———————— x 100
Revenue
Added Value =
Sales Revenue - Cost of brought in goods/services
Return on capital employed (% ROCE) =
Operating Profit
————————————————— x 100
Total equity + Non-current liabilities
Current Ratio =
Current Liabilities
Gearing (%) =
Non-current liabilities
——————————– x 100
Capital employed
Payables days =
Payables
—————– x 365
Cost of sales
Receivables Days =
Receivables
——————- x 365
Revenue
Inventory Turnover =
Avg inventories held
Labour Turnover =
Number of staff leaving
————————————- x 100
Number of staff employed
Retention rate =
Number of employees remained for whole period
————————————————————————- x100
Number of employees at start of period
Employee costs as a % of turnover =
Employee costs
————————– x 100
Turnover/Revenue
Labour cost per unit =
Units of output
Market cap =
Number of ordinary issued shares x price of 1 share (current market price)
Ordinary share capital =
Number of ordinary issued shares x price of 1 share at first issue
Return on investment =
Profit/Return from investment
——————————————– x 100
Cost of investment
Profit for the year margin =
Profit for the year
————————– x 100
Revenue
Gross profit =
Revenue - cost of sales
Operating profit =
Gross profit - operating expenses
Profit for the year =
Operating profit + profit from other activities - net finance costs - tax
Break-even output =
Fixed costs
—————————— x 100
Contribution per unit
Contribution per unit =
selling price - variable cost per unit
Total contribution =
Total revenue - total variable costs
Margin of safety =
Actual level of output - break-even output
Working capital =
cash + stock + debtors - creditors
Average rate of return (ARR) =
Average Net Return
—————————– x 100
Investment
Payback period =
Amount invested / annual net return
Formula for discount factor (basically just compound)
(1 / 1 + interest rate) ^how many years
Return =
Net Present Value
______________ x 100
Investment
Net present value =
Total - investment
Capital Employed =
Total equity + non-current liabilities
Total equity =
Total assets - Total liabilities
