Equations Flashcards
Revenue
Selling price per unit x number of units sold
Variable costs
Variable cost per unit x number of units sold
Total costs
Fixed costs + variable costs
Profit (2 options)
Total revenue = total costs
Total contribution - fixed costs
Market capitalisation of a business
Number of issued shares x current share price
Expected value of a decision with two possible outcomes
[pay-off of A x probability of A] + [pay-off of B x probability of B]
Net gain
Expected value - initial cost of decision
Market growth %
Change in the size of the market over a period / original size of the market x 100
Market share %
Sales of one product of brand or business / total sales in the market x 100
Added value
Sales revenue - costs of bought in goods and services
Labour productivity
Output over a time period / number of employees
Unit costs (average costs)
Total costs / number of units of output
Capacity utilisation %
Actual output / maximum possible output x 100
Return on investment %
Profit from the investment £ / cost of the investment £ x 100
Gross profit
Revenue - cost of sales
Profit from operations
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
Profit from operations margin
Operating profit / revenue x 100
Profit for year margin %
Profit for year / revenue
Variance
Budgeted figure - actual figure
Contribution per unit
Selling price - variable costs per unit
Total contribution (2 options)
Contribution per units sold
Total revenue - total variable costs
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 by the business x 100
Employee retention rate % for a particular time period
Number of employees who reminded with the business for the whole period of time / number of employees at start of the time period x 100
Employee costs as a percentage of turnover
Employee costs / turnover x 100
Labour cost per unit
Labour costs / units of output
Return on capital employed %
Operating profit / total equity + non current liabilities
Current ratio
Current assets / current liabilities
Gearing %
Non current liabilities / total equity + non current liabilities x 100
Payable days
Payables / cost of sales x 365
Receivable days
Receivables / revenue x 365
Inventory turnover
Cost of sales / average inventories held
Average rate of return %
Average annual return / initial cost of project
PED
% change in the quantity demanded / % change in price
YED
% change in quantity demanded / % change in income
