Formulas Flashcards
Calculate net profit margin
(net profit / revenue) x 100
Calculate return on capital employed
(net profit / capital employed) x 100
Calculate gross profit margin
(gross profit / revenue) x 100
Calculate current ratio
current assets / current liabilities
Calculate net current assets
current assets - current liabilities
Calculate net profit
gross profit - other expenses (sometimes + other income streams)
Calculate sales revenue
quantity sold x price
Calculate trade payable days
(trade payables / credit purchases) x 365
Calculate trade receivable days
(trade receivables / credit sales) x 365
Calculate average inventory
(opening inventory + closing inventory) / 2
Calculate depreciation using the straight line method
original price - (depreciation amount x number of years)
Calculate depreciation using the reducing balance method
current value x depreciation rate (% per year) x number of years
Calculate price elasticity of demand
% change in quantity demanded / % change in price
Calculate variable costs
variable cost per unit x number of units sold
Calculate total costs
fixed costs + variable costs
Calculate income elasticity of demand
% change in quantity demanded / % change in income
Calculate net cash flow
cash inflow - cash outflow
Calculate break even output
fixed costs / contribution per unit
Calculate margin of safety
actual output - break even output
Calculate budget variance
budget amount - actual amount
Calculate capital employed
opening capital + net profit - drawings
Calculate labour productivity
output / number of employees
Calculate labour turnover (% of employees leaving)
(number of employees leaving / total number of employees) x 100
Calculate break even point
fixed costs / contribution per unit
Calculate market share %
(sales of the business / total sales in market) x 100
Calculate market capitalisation
number of issued shares x current share price
Calculate return on capital employed
(return on investment / cost of investment) x 100
Calculate profit for year margin in %
(profit for year / sales revenue) x 100
Define mark-up ratio
The ratio of gross profit to sales price
Define inventory turnover
The rate that inventory stock is sold or used after coming into possession of the company
1) Define liquid capital
2) Define liquid capital ratio
1) Assets that can be converted into cash with little impact on overall value
2) How much of your capital is liquid?
Calculate contribution per unit
selling price - variable costs
Calculate gross profit
sales revenue - cost of goods sold
Calculate inventory turnover ratio (in days)
(average inventory / cost of goods sold) x 365
Calculate liquid capital ratio
(current assets - current inventory) / current liabilities
Calculate cost of goods sold
opening inventory + purchases - closing inventory
Calculate mark-up ratio
(gross profit / cost of sales) x 100
If you’re asked to calculate something’s “margin”, what is the process?
( ______ / revenue) x 100
