Equations Flashcards
Total costs
Total cost = fixed cost + variable costs
Total variable costs
Total variable costs = variable cost per unit x number of units sold
Revenue
Revenue = price x quantity sold
Market capitalisation
Market capitalisation = number of issues shared x current share price
Expected value
Expected value = probability of outcome x expected pay off
Market growth
Marker growth = (new market size - old market size / old market size) x 100
Market share
Market share = (sales / total market size ) x 100
Sales growth (%)
Sales growth (%) = (sales this year - sales last year / sales last year) x 100
Price elasticity of demand
Price elasticity of demand = % change in quantity demanded / % change in price
Income elasticity of demand
Income elasticity of demand = % change in quantity demanded / % change in income
Added value
Added value = sales revenue - cost of bought in services or good
Capacity utilisation (%)
Capacity utilisation (%) = (output / capacity) x 100
Labour productivity
Labour productivity = output per period / number of employees
Unit costs
Unit costs = total costs / total units
Re-order level
Re-order level = lead times (days) x average daily use + buffer stock level
Profit for the year
Profit for the year = operating profit + other profit - net finance costs - tax
Profit for the year margin (%)
Profit for the year margin (%) = profit for the year / sales revenue
Return on investment (%) =
Return on investment (%) =
Return on investment (£) / cost of investment (£) x 100
OR
Financial gain from investment - cost of investment (£)
Percentage change in profits (%)
Percentage change in profits (%) = (current year profit - previous year profit / previous year profit) x100
Gross profit
Gross profit = revenue - cost of sales
Gross profit margin (%)
Gross profit margin (%) = (gross profit/ revenue) x 100
Operating profit
Operating profit = revenue - cost of sales - operating expenses
Operating profit margin (%)
Operating profit margin (%) = (operating profit/ sales revenue ) x 100
Contribution per unit
Contribution per unit = selling price per unit - variable costs per unit
Total contribution
Total contribution =
Total revenue - total variable costs
OR
Contribution per unit x number of units sold
Break even output
Break even output = Fixed costs / contribution per unit
Margin of safety
Margin of safety = actual output - break even output
Labour turnover
Labour turnover = number of employees leaving during a period / average number employed during a period
Labour productivity
Labour productivity = output per period (units) / number of employees
Absenteeism
Absenteeism =
(Number of staff absent during a period / number employed during a period) x 100
OR
(Number of days taken off unauthorised in a period / total days worked by staff over a period) x 100
Labour costs per unit
Labour costs per unit = labour costs / units of output
Employee costs as a % of turnover
Employee costs as a % of turnover = (employee costs / sales turnover) x 100
Labour retention %
Labour retention % = (staff employed currently - number of leavers / number of staff employed at the start of period) x 100
