Formualrs Flashcards
1
Q
What is the gross profit formula
A
Revenue - cost of sales
2
Q
What is the gross profit margin formula
A
Gross profit divided by revenue times by 100
All margins are in percentages
3
Q
What is the operating profit formula
A
Revenue minus (fixed costs plus variable cost)
4
Q
What is the operating profit margin formula
A
Operating profit divided by revenue times by 100
Remember all margins are in percentages
5
Q
What is the break even formulae?
A
(Fixed costs) divided by (selling price-variable costs)
OR
fixed costs/ contribution. Contribution is known as what is contributed to the fixed costs.
6
Q
What is the Margin of safety formulae?
A
Sales minus break even output.
The higher the MOS the less risk the business is at of not making profit.
