formulae Flashcards
revenue (sales or turnover) =
revenue = selling price per unit X number of units sold
variable costs (total variable costs)
Total variable costs = variable cost per unit X number of units sold
total costs
total costs = fixed costs + variable costs
profit
profit = total revenue - total costs
OR
profit = total contribution - fixed costs
market capitalisation of a business =
market cap = number of issued shares x current share price
expected value of decision with 2 outcomes
(pay off of A x probability of A ) + (pay off of B x probability of B)
net gain
net gain = expected value - initial cost of decision
market growth %
market growth %= change in size of market over a period / original size of the market x 100
market share %
market share % = sales of one product or business / total sales in market x 100
added value
added value = sales revenue - costs of bought in goods and services
labour productivity
labour productivity = output over a time period / number of employees
unit costs (average costs)
unit costs = total costs / number of units of output
capacity utilisation (%)
cap util = actual output / maximum possible output
return on investment %
return on inv= profit from investment/ cost of investment x 100
Gross profit
gross profit = revenue - cost of sales
profit from operations
profit from operations = gross profit - operating expenses
profit for the year
profit from the year = operating profit + profit from other activities - net finance costs - tax
gross profit margin %
gross profit margin % = gross profit / revenue x 100
profit from operations margin %
profit from operations margin % = operating profit / revenue x 100
profit for the year margin %
profit for the year margin % = profit for the year / revenue x 100
variance
variance = budgeted figure - actual figure
contribution per unit
contribution per unit = selling price - variable costs per unit
total contribution =
total contribution =
contribution per unit x Units sold
or
total contribution =
total revenue - total variable costs
break evan output =
break even output =
fixed costs / contribution per unit
margin of safety
margin of safety = actual level of output - break even level of output
labour turnover %
labour turnover % = number of staff leaving / number of staff employed x 100
employee retention rate % for period of time
number of employees who remained for the whole time period / number of employees at the start of the time period x 100
employee costs as a percentage of turnover
employee costs / turnover x 100
labour cost per unit
labour costs per unit = labour costs / units of output
