Equations Flashcards
Market size
Number of units sold x price
Operating profit
Gross profit - expenses
Operating profit margin
Operating profit / sales revenue x100
Profit
Total revenue - total costs
Profit of the year
Operating profit -interest / tax
Profit of the year margins
Profit of the year / sales revenue x100
Sales revenue
Selling price x quantity sold
Total cost
Fixed cost + variable cost
Total revenue
Selling price x quantity sold
Variance analysis
Budgeted figure - actual figure
Acid test ratio
Liquid assets /current liability
Adverse variance
Budgeted figure - actual figure
Break even
Tc = tr
Break even point
Fixed cost / contribution per unit
Capacity Utilisation
Actual output / maximum output x 100
Contribution
Selling price - variable cost per unit
Current ratio
Current assets : current liabilities
Favourable variance
Budgeted - actual figure
Gross profit
Sales revenue - cost of sales
Gross profit margin
Gross profit/ sales revenue x100
Margin of safety
Actual output - break even output
Market size
Number of units sold x price
Market share
Sales of one firm/ total market sales x100
Market growth
Change in size of market / original size x100
Price elasticity
% change in quantity demanded / % change in price
Total revenue
Price x demand or number of units sold
Income elasticity of demand
%change on quantity demand / % change in income
labour productivity
total output/ number of workers
labour turnover
number of staff leaving / average number of staff x100
retention rates
number of employees serving for more than 1 year /average number of staff x100
Absenteeism
Number of staff absent per time period/
Total number of staff days worked per time period x100
gearing
Non-current liabilities/
Total equity + non-current liabilities x100
ROCE
Operating profit/
Total equity + non-current liabilities x100
float time
LFT – duration – EST
average rate of return
- Total net cash flow / number of years
- Divide average annual income by initial investment x 100
Discounted cash flow - Net Present Value
Step 1 : Multiply each net cash inflow by the relevant discount factor
Step 2 : add up all the annual NPVs to calculate the total return on the investment
payback
Step 1: Calculate during which year the investment cost will be covered
Calculate how many months
remaining to be paid/already paidx 12 months
ARR
Total net cash flow / number of years
Divide average annual profit by initial investment x 100
discounted cash flow
Step 1 : Multiply each net cash inflow by the relevant discount factor
Step 2 : add up all the annual NPVs to calculate the total return on the investment
