Equations for Theme 2&3 Flashcards
Net cash flow
Inflows - Outflows
Sales volume
Total number of units sold over a period of time
Sales Revenue
Price x Quantity
Total variable costs
Number of units sold x variable cost per unit
Total costs
Fixed costs + Variable costs
Profit
Total revenue - total costs
Contribution per unit
Selling price - variable costs
Total contribution
CPU x number of units sold
Break even output
Fixed costs/CPU
Margin of Safety
Sales volume - BEO
Variance
Actual - budget
Gross profit
Sales revenue - cost of sales
Operating profit
Gross profit - overheads
Net profit
Operating profit +/- finance of costs
Gross profit margin
(Gross profit/ Sales Revenue) x100
Operating profit margin
(Operating profit/Sales revenue) x100
Profit for the year (Net Profit margin)
(Net profit/Sales revenue) x100
Current ratio
Current assets / Current liabilites
Acid test ratio
(Current assets-stock) / Current liabilities)
Working capital
Current assets - Current liabilities
Productivity (Labour)
Output per period (units) / Number of employees
Capacity Utilisation
(Actual level of output / Maximum possible output) x100
Labour turnover
(Number of employees leaving / Average number of employees) x100
Labour retention rate
(Number of employees remaining / average number of employees) x100
