Equations Flashcards
Total costs
Fixed costs + Variable costs
Unit costs
Total cost / output
Contribution per unit
Price - variable costs
Break even
Fixed costs / contribution
Margin of safety
Actual sales - break even sales
Average rate of return
(Annual average profit / cost of investment) x 100
Net cash flow
Total inflows - total outflows
Gross profit
Sales revenue - cost of sales
Operating profit
Gross profit - Expenses
Profit before tax
Operating profit - finance costs
Retained profit
Net profit - tax and dividends
Working capital
Current assets - current liabilities
Net assets
Total assets - Current liabilities - non-current liabilities
Straight line depreciation
(Initial costs - residual value) / life of asset
Current ratio
Current assets / current liabilities
Acid test
(Current assets - stock) / current liabilities
Debt to equity ratio
(Debt / equity) x 100
Interest cover
Operating profit / interest payable
Asset turnover
Revenue / non-current assets
Stock turnover
Cost of stock / average stock
Debtor days
(Trade receivables / revenue) x 365
Creditor days
(Trade payables / revenue) x 365
Gross profit margin
(Gross profit / sales revenue) x 100
Net profit margin
(Net profit / sales revenue) x 100
Return on equity
Profit for the year / shareholders equity
Dividend per share
Total dividends paid / shares issued
Dividend yield
(Dividend per share / market price of share) x 100
Earnings per share
Profit for the year / number of shares issued
Price earnings ratio
Market price of share / earnings per share
Return on capital employed
(Operating profit / capital employed) x 100
Gearing
(Non-current liabilities / capital employed) x 100
Revenue
Price x quantity sold
