Equations (whole of Business A-level) Flashcards
What is the formula for Market capitalisation of a business?
Number of issued shares × Current share price
How is Dividend yield (%) calculated?
Dividend per share (£) ÷ Share price (pence)
What does Market growth (%) represent?
Change in the size of the market over a period ÷ Original size of the market
How is Market share (%) calculated?
Sales of one product OR brand OR business ÷ Total sales in the market
What is the Price elasticity of demand formula?
% change in the quantity demanded ÷ % change in price
How is Income elasticity of demand defined?
% change in the quantity demanded ÷ % change in income
What is the formula for Revenue (Sales or Turnover)?
Selling price per unit × Number of units sold
How are Total variable costs calculated?
Variable cost per unit × Number of units sold
How do you calculate total costs?
Fixed costs - variable costs.
What is the formula for Contribution per unit?
Selling price - Variable costs per unit
How do you calculate Total contribution?
Contribution per unit x Units sold
Alternatively, Total revenue - Total variable costs
What is the formula for Break-even output?
Fixed costs / Contribution per unit
How is Margin of safety calculated?
Actual level of output - Break-even level of output
What is the formula for Payable days?
Payables / Cost of sales x 365
How do you calculate Receivable days?
Receivables / Revenue x 365
What is the formula for Current ratio?
Current assets / Current liabilities
How do you calculate Acid test ratio?
(Current assets - Inventory) / Current liabilities
What is the formula for Profit?
Total revenue - Total costs
Alternatively, Total contribution - Fixed costs
