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Business > Equations > Flashcards

Equations Flashcards

1
Q

Total costs

A

Fixed costs + Variable costs

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2
Q

Profit

A

Total revenue - Total costs

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3
Q

Sales revenue

A

Selling price per unit × Number of units sold

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4
Q

Market capitalisation of a business

A

Number of issued shares × Current share price

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5
Q

Expected value

A

Financial outcome X Probability + Results

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6
Q

Net gain (Decision tree)

A

Expected value - Initial cost of decision

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7
Q

Market growth (%)

A

Change in size of market between year(x-1) and year(x) / Size of market in year(x-1) X 100

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8
Q

Sales growth (%)

A

Change in sales of product or business between year(x-1) and year(x) / Sales of product or business in year(x-1) X 100

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9
Q

Market share (%)

A

Sales of one product, brand or business / Total sales in market X 100

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10
Q

PED

A

Percentage change in quantity demand / Percentage change in price

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11
Q

Added value

A

Sales revenue - Costs of goods and services

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12
Q

Labour productivity

A

Output per time period / Number of employees

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13
Q

Capacity utilisation (%)

A

Actual output in given time / Maximum possible output in given time X 100

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14
Q

ROI (%)

A

Return on investment / Cost of investment X 100

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15
Q

Gross profit

A

Sales revenue - Cost of sales

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16
Q

Operating profit

A

Sales revenue - Cost of sales - Operating expenses

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17
Q

Gross profit margin (%)

A

Gross profit / Sales revenue X 100

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18
Q

Operating profit margin (%)

A

Operating profit / Sales revenue X 100

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19
Q

Profit for the year

A

Operating profit + Profit from other activities - Net finance costs - Tax

20
Q

Profit for the year margin (%)

A

Profit for the year / Sales revenue X 100

21
Q

Contribution per unit

A

Selling price - Variable cost per unit

22
Q

Total contribution

A
  1. Contribution per unit X Units produced or sold
  2. Total revenue - Total variable costs
23
Q

Margin of safety

A

Actual level of output - Breakeven level of output

24
Q

Profit for the year margin (%)

A

Profit for the year / Sales revenue X 100

25
Q

Labour turnover (%)

A

Number of staff leaving during year / Average number of staff employed during year X 100

26
Q

Employee retention rate (%)

A

Number of employees at end of period - Number of leavers / Number of employees at end of period X 100

27
Q

Employee costs as percentage of turnover (%)

A

Employee costs / Sales turnover X 100

28
Q

Labour cost per unit

A

Labour costs / Units of output

29
Q

ROCE (%)

A

Operating profit / Total equity + Non current liabilities X 100

30
Q

Current ratio

A

Current assets / Current liabilities

31
Q

Gearing (%)

A

Non current liabilities / Total equity + Non current liabilities X 100

32
Q

Payables days

A

Payables / Cost of sales X 365

33
Q

Receivables days

A

Receivables / Sales revenue X 365

34
Q

Inventory turnover

A

Cost of goods sold / Average inventories held

35
Q

ARR (%)

A

Net return from project or number of years / initial cost of project X 100

36
Q

Total variable costs

A

Variable cost per unit × Number of units sold

37
Q

Market size volume

A

Quantity of goods and services produced in market over time period

38
Q

Market size value

A

Total sales revenue generated from selling all of goods and services in a market over time period

39
Q

Sales volume

A

Quantity of goods and services produced by business over time period

40
Q

Sales value

A

Total sales revenue of business in time period

41
Q

Unit costs

A

Total cost of production / Number of units of output produced

42
Q

Variance

A

Difference between actual and budgeted figure.

Favourable variance - profits higher than forecast

Adverse variance - profits lower than forecast

43
Q

Break-even

A

Fixed costs / Contribution per unit

44
Q

Break-even point on chart

A

Total revenue = Total costs

45
Q

Break-even chart profit point

A

Vertical distance between Total revenue and Total cost

Business (8 decks)

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