Formulae Flashcards
Revenue=
Revenue= selling price × units sold
Variable costs=
Variable costs= variable costs per unit × units sold
Total costs=
Total costs= fixed costs + variable costs
Profit=
Profit= revenue - costs
Profit=
Profit= Total contribution - fixed costs
Market capitalisation=
Market capitalisation= shares issued × current share price
Expected value of a decision with two possible outcomes eg.
A&B=
A&B= (cost of A × possibility of A) + (cost of B × possibility of B)
Net gain=
Net gain= expected value - initial cost of decision
Market growth(%)=
Market growth(%)= (change of original size of market over time ÷ original size of market) × 100
Market share(%)=
Market share(%)= (sales of one product or business ÷ total sales in market) × 100
Added value=
Added value= sales revenue - costs of bought-in goods and services
Labour productivity=
Labour productivity= output over time ÷ number of employees
Unit costs (average)=
Unit costs (average)= total costs ÷ number of units of output
Capacity utilisation (%)=
Capacity utilisation (%)= (actual output ÷ maximum possible output) × 100
Return on investment (%)=
Return on investment (%)= (profit from the investment ÷ cost of investment) × 100
Gross profit=
Gross profit= revenue - variable costs
Operating profit=
Operating profit= gross profit - operating expenses
Profit for the year=
Profit for the year= operating profit + profit from other activities - net finance costs - tax
Gross profit margin(%)=
Gross profit margin(%)= (gross profit ÷ revenue) × 100
Operating profit margin (%)=
Operating profit margin (%)= (operating profit ÷ revenue) ×100
Profit for the year margin (%)=
Profit for the year margin (%)= (profit for the year ÷ revenue) × 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 × unit sold
Or
Total revenue - total variable costs
Break-even 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 by the business) × 100
Employee retention rate (%)=
Employee retention rate (%)= (number of employees remaining in a period of time ÷ number of employees at the start of the time period) × 100
Employee costs as a percentage of turnover=
Employee costs as a percentage of turnover= (employee costs ÷ turnover) × 100
Labour costs per unit=
Labour costs per unit= Labour costs ÷ units of output
Return on capital employed (ROCE)(%)=
Return on capital employed (ROCE)(%)= (operating profit ÷ (total equity+ non-current liabilities)) × 100
Where total equity + non-current liabilities = capital employed
Current ratio=
Current ratio= current assets ÷ current liabilities
Gearing (%)=
Gearing (%)= (non-current liabilities ÷ (total equity + non-current liabilities) × 100
Where total equity + non-current liabilities = capital employed
Capital employed=
Capital employed= Where total equity + non-current liabilities
Payables days=
Payables days= (payables ÷ cost of sales) × 365
Receivables days=
Receivables days= (receivables ÷ revenue) × 365
Inventory turnover=
Inventory turnover= cost of sales ÷ average inventories held
Average rate of return (%)=
Average rate of return (%)= (average annual return (£) ÷ initial cost of project (£)) × 100
