Formulas Flashcards
Revenue
price x quantity
Total variable cost (TVC)
VC per unit x quantity
Total cost (TC)
Total variable cost + fixed cost
Average cost (AC)
Total cost / quantity
Break even (BE)
FC/selling price-VC per unit(average variable cost)
Contribution per unit
selling price-VC per unit
Margin of safety (MOS)
actual sales-BE quantity
Target profit quantity
(FC + target profit)/contribution per unit
Target price
average fixed costs+ average variable costs
or
(Total fixed costs/output) + average variable cost
Cost of sales (production)
raw materials + direct labour
Cost of sales (retail)
Opening stock + purchases - closing stock
Gross profit
sales revenue - cost of sales
net profit before interest and tax
Gross profit - expenses
Net profit
Net profit before tax - tax
Working capital
current assets - current liabilities
Net assets
Total assets - Total liabilities
or
(Fixed assets + current assets) - (Long term liabilities + current liabilities)
Annual depreciation (straight-line method)
(Purchase cost - Residual value)/ useful life span
Depreciation
Net book value x Depreciation value
Capital employed
Loan capital + Share capital + Accumulated retained profits
or
Long-term liabilities + Share capital + Accumulated retained profits
Net cash flow
Cash inflows - Cash outflows
Closing balance
Opening balance + Net cash flow
Opening balance
Closing balance from the previous month
Payback period (PBP)
Cost of Investment/ Contribution per month
