Formulas Flashcards
Revenue
Also known as sales/turnover
Selling price per unit x Number of units sold
Variable cost
Variable cost per unit x number of units sold
Total costs
Fixed costs + Variable costs
Profit
Total revenue - Total costs
OR
Total contribution - Fixed costs
Market capitalisation
Number of shares issued x share price
Expected value of a decision with two possible outcomes eg 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 size of market over a period)/
(Original size of market)
X100
Market share (%)
(Sales of one product OR Brand OR Business) / (Total sales in the market)
x100
Added value
Sales revenue - costs of bought-in goods and services
Labour productivity
(Output over a time period)/(Number of employees)
Unit costs
(Total costs) / (Number of units of output)
Capacity utilisation (%)
(Actual output) / (Maximum possible output)
x100
Return on investment (%)
(Profit from the investment) / (Cost of the investment)
x100
Gross profit
Revenue - Cost of sales
Operating profit
Gross profit - Operating expenses
Profit for the year
Operating profit + profit from other activities - Net finance costs - Tax
Gross profit margin (%)
Gross profit / revenue x100
Operating profit margin (%)
Operating profit / Revenue x100
Profit for the year margin (%)
Profit for the 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
OR
Total revenue - Total variable costs
Break even output
Fixed costs / contribution per unit
Margin of safety
Actual level of output - Break even level of output
Labour turnover (%)
(Number of staff leaving) / (Number of staff employed by the business) x100
Employee retention rate (%)
(Number of employees who remained with the business for the whole period of time) / (Number of employees at start of the time period)
x100
Employee cost as percentage of turnover
Employee costs / turnover x100
Labour cost per unit
Labour costs / units of output
Return on capital employed (ROCE) (%)
(Operating profit) / (Total equity + Non-current liabilities x100
Current ratio
Current assets / current liabilities
Gearing (%)
(Non current liabilities) / (Total equity + non-current liabilities) x100
Payables days
Payables / Cost of sales x365
Receivables days
Receivables / revenue x365
Inventory turnover
Cost of sales / Average inventories held
Average rate of return (%)
(Average annual return) / (Initial cost of project) x100
