Equations Flashcards
Total costs
Fixed costs + Variable costs
Profit
Total revenue - Total costs (or total contribution - fixed costs )
Total variable costs
Variable cost per unit x number of units sold
Revenue or turnover
Selling price per unit x number of units sold
Market capitalisation
Number of shares issued x current share price
Decision trees
- (expected value of a decision wish two possible outcomes) -A+B
- net gain
- (Pay off of A x probability of A) + (pay off of B x probability)
- expected value- initial cost of decision
Market size
- volume
- value
Quantity of goods produced in a market over a period of time
The total sales revenue generated by a market in a period of time
(Both are usually in a year)
Sales volume
Sales value
Quantity of goods and services produced by a particular business overtly a period of time
Total sales revenue of a particular business over a period of time (usually a year)
Market growth
Expressed as a percentage
Change in the size of the market between year X-1 any year X / X100
Size of the market in year X-1
Sales growth
Expressed as a percentage
Change in sales of product or business between year X-1 and year X / X100
Sales of product or business in year X-1
Market share
Expressed as a percentage
Sales of one product, brand or business / X100
Total sales in the market
PED
Percentage change in quantity demanded/ X100
Percentage change in price
Inelastic = less than 1
Elastic= 1 or greatest
Added value
Sales revenue - cost of bought in goods and services
Labour productivity
Output per time period/
Number of employees
Unit costs
Total costs of production/
Number of units of output produced
Capacity utilisation
Expressed as a percentage
Actual output in a given time period/ X100
Maximum output
Return of investment
Expressed as a percentage
Return on investment/ X100
Cost of investment
Gross profit
Sales revenue - cost of sales
Profit from operations/ operating profit
Sales revenue- cost of sales- operating expenses
Profit for the year
Operating profit + any other profit - Net financial costs (-tax)
Variance
The difference between any actual man’s a budgeted figures
- favourable variance in profit its greater than forecast
- adverse beings less
Contribution per unit
Selling price - variable costs per unit
Total contribution (x2)
Contribution per unit X units produced or sold
Total revenue - total variable costs
Break- even output
Fixed costs/ contribution per unit
Break even output on a graph
The level of output act which total revenue = total costs
Margin of safety
Actual level of output - break even level
Gross profit margin
Expressed as a percentage
Gross profit/
Sales revenue X100
Operating profit margin
Expressed as a percentage
Operating profit/
Sales revenue X100
Profit for the year margin
Expressed as a percentage
Profit for the year/
Sales revenue. X100
Labour turn over
Expressed as a percentage
Number of staff leaving during the year/ average number of staff employee by the business during the year X100
Employee retention rate
Expressed as a percentage
Number of staff leaving during a year/
Avg number of staff employed by the business during the year X100
Labour cost per unit
Labour costs/
Units of output
