Equations Flashcards
Revenue
Selling price per unit x number of units sold
Variable costs
Variable costs per unit x units sold
Total costs
Fixed costs + variable costs
Profit
Revenue - costs
Market capitalisation
Number of issued shares x current share price
Net gain
Expected value - initial cost of decision
Market growth (%)
(Change in market size over a period/original size of the market) x 100
Market share (%)
(Sales of one product/ total sales in the market) x 100
Added value
Sales revenue - bought in goods or services
Labour productivity
Output over a time period/ number of employees
Unit costs
Total costs/ number of units of outputs
Capacity utilisation (%)
Actual output/ maximum possible output
Return on investment (%)
(Profit from investment/ cost of investment) x 100
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
Gross profit margin (%)
(Gross profit/ revenue) x 100
Operating profit margin (%)
(Operating profit/ revenue) x 100
Profit for year margin (%)
(Profit for year/ revenue) x 100
Variance
Budgeted figure - actual figure
Contribution per unit
Selling price - variable cost per unit
Total contribution
Contribution per unit x units sold OR total revenue - total variable cost
Break-even output
Fixed costs/ contribution per unit
Margin of safety
Actual level of output/ break-even level of output
Labour turnover (%)
(Number of staff leaving/ number of staff employed) x 100
Employee retention rate (%)
Number of employees who remained with business for the whole period of time/ number of employees at the start of the time period
Employee costs as a percentage of turnover (%)
(Employee costs/ turnover) x 100
Labour costs per unit
Labour costs/ units of output
ROCE (%)
(Operating profit/ total equity + non-current liabilities) x 100
Current ratio
Current assets/ current liabilities :1
Gearing (%)
(Non-current liabilities/ total equity + non-current liabilities) x 100
Payable days
Payables/ cost of sales x 365
Receivables days
Receivables/ revenue x 365
Inventory turnover
Cost of sales/ average inventories held
ARR (%)
(Average annual return/ initial cost of project) x 100
Capital employed
Total equity + non- current liabilities
