Equations Flashcards
Shareholders’ funds =
Share capital + reserves
Total equity =
Share capital + reserves
Capital employed =
Shareholders’ funds + long-term liabilities
Working capital =
current assets - current liabilities
current ratio =
current assets/current liabilities
acid test ratio =
current assets-stock/current liabilities
price elasticity of demand =
% change in quantity demand/ % change in price
Income elasticity of demand =
% Change in quantity demand/ % change in income
variance =
Budgeted figure - actual figure
Depreciation =
Original cost of the fixed asset/ Useful life of the asset
ROCE =
Operating profit/capital employed x 100
Payback =
Cumulative cash flow value/ net cash flow for the next year
x 12
Year is when it changes from a negative cumulative cashflow to a psoitive
ARR
Average annual profit/ cost investment
x 100
Contribution per unit =
Selling price - variable costs per unit
Total contribution =
contribution per unit x units sold
OR
Total revenue - Total variable costs
