Formualae/Equations Flashcards
Total Costs
Total Costs=Total Fixed Costs + Total Variable Costs
Variable Costs
Variable Costs= Cost of one unit x Quantity produced
Revenue
Revenue = price x quantity
Break-Even
Break Even = fixed costs DIVIDED BY (sales price-variable costs)
Margin of Safety
Margin of Safety = actual sales - break even sales
Interests
Interest in % = total repayment - borrowed amount DIVIDED BY borrowed amount
X by 100
Net Cash Flow
net cash flow = cash inflows - cash outflow
Opening balance
opening balance = closing balance of the previous months
Closing Balance
closing balance = opening balance + net cash flow
Profit
profit/loss = total revenue - total costs
gross profit
gross profit = sales revenue - costs of sales
gross profit margin
gross profit margin (%) = gross profit DIVIDED BY sales revenue
x by 100
net profit
net profit = gross profit - other operating expenses and interest
net profit margins
net profit margin (%) = net profit DIVIDED BY sales revenue
x by 100
Average Rate of Return
Average rate of return (%) = average annual profit (total profit/no. of years) DIVIDED BY cost of investment
x100
