Formulae Flashcards
Revenue (or sales or turnover)
Selling price per unit x Number of units sold
Variable costs (total variable costs)
Variable cost per unit x Number of units sold
Total costs
Fixed costs + Variable costs
Profit
Total revenue - Total costs
Total contribution - Fixed costs
Market capitalisation of a business
Number of issued shares x Current share price
Expected value of a decision with two possible outcomes e.g. A&B
[Pay-off of A x Probability of A] + [Pay-off of B x Probability of B]
Net gain
Expected value - Initial cost of decision
Market growth (%)
(Change in the size of the market over a period / Original size of the market) x 100
Market share (%)
(Sales of one product OR brand OR business / Total sales in the market) x 100
Added value
Sales revenue - Costs of bought-in goods and services
Labour productivity
Output over a time period / number of employees
Unit costs (average costs)
Total costs / Number of units of output
Capacity utilisation (%)
(Actual output / maximum possible output) x 100
Return on investment (%)
(Profit from the investment (£) / Cost of the investment (£)) x 100
Gross profit
Revenue - Cost of sales
Profit from operations (operating profit)
Gross profit - Operating expenses
Profit for year
Operating profit + Profit from other activities - Net finance costs - Tax
Gross profit margin (%)
(Gross profit / Revenue) x 100
Profit from operations margin (operating profit margin) (%)
(Operating profit / Revenue) x 100
Profit for year margin (%)
(Profit for year / Revenue) x 100
Variance
Budgeted figure - Actual figure
Contribution per unit
Selling price - Variable costs per unit
Total contribution
Contribution per unit x Units sold
Total revenue - Total variable costs
Break-even output
Fixed costs / Contribution per unit
