Equations Flashcards
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Gross profit margin
operating profit/sales revenue x 100 gross profit margin
Profit for year margin
profit for year/sales revenue x 100 Profit for year margin
Labour Turnover
number of staff leaving during the year/average number of staff employed by the business during the year x 100
Labour Turnover
Employee retention rate (%) for a particular time period
number of employees at end of period number of leavers/number of employees at end of period x 100
Employee costs as percentage of turnover
employee costs/sales revenue x 100
Labour costs per unit
labour costs/ units of output
ROCE
Operating profit/Total equiity + non-current liabilities x 100
Where total equity plus non-current liabilities=Capital employed.
Current ratio
Current assets/Current liabilities
Gearing (%)
Non-current liabilities/Total equity+non-Current liabilities x 100
Where total equity plus non-current liabilities = capital employed
Payable days
payable/cost of sales x 365
where payables = creditors
Receivable days
receivables/sales revenue x 365
where receivables = debters
inventory turnover
Cost of goods sold (COGS)/average inventories held
Average rate of return (%)
Average rate of return (%) = net return from project (£) or number of years/initial cost of project (£) x100
Operating profit margin:
Operating profit/revenue (x 100 for %)
Asset turnover:
Revenue/net assets
