Finance equations Flashcards
What is the equation for PERCENTAGE CHANGE?
(Difference or change / original) x 100
What is the equation for REVENUE?
Price x units sold
What is the equation for TOTAL COSTS?
Variable costs + fixed costs
What is the equation for AVERAGE UNIT COST?
Total cost / output
What is the equation for PROFIT?
Total revenue - total costs
What is the equation for MARKET SHARE?
(Sales value or volume of your business / Sales value or volume of whole market) x 100
What is the equation for MARKET GROWTH?
(Change in sales value or volume / Original sales value or volume) x 100
What is the equation for Average Rate of Return (ARR)?
((Total Profit - Investment Cost) / num of years) / Initial investment cost
What is the equation for BREAK EVEN OUTPUT?
Total input = total output
What is the equation for MARGIN OF SAFETY?
Actual sales (OR forecasted sales) - break even output
What is the equation for NET CASH FLOW?
Total inflow - total outflows
What is the equation for CLOSING BALANCE?
Opening balance - net cash flow
What is the equation for GROSS PROFIT?
Revenue - cost of sales
What is the equation for OPERATING PROFIT?
Gross profit - Overheads or expenses
What is the equation for NET PROFIT?
Operating Profit - tax - finance costs
What is the equation for GROSS PROFIT MARGIN?
(Gross profit / sales revenue) x 100
What is the equation for NET PROFIT MARGIN?
(Net profit / sales revenue) x 100
What is the equation for NET CURRENT ASSETS?
Current assets - current liabilities
What is the equation for NET ASSETS?
Total assets - total liabilities
What is the equation for TOTAL EQUITY?
Share capital + retained profits
What is the simpler equation for AVERAGE RATE OF RETURN (ARR)?
(Average annual profit / cost of investment) x 100
