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formulas Flashcards

1
Q

Total costs

A

fixed costs + variable costs

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2
Q

Profit

A

total revenue - total costs
or
total contribution - fixed costs

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3
Q

Total variable costs

A

variable cost per unit X number of units sold

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4
Q

Sales revenue

A

selling price per unit X number of units sold

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5
Q

Market capitalisation

A

number of issued shares X share price

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6
Q

Expected value of a decision with two possible outcomes ( A and B)

A

(pay off of A x probability of A) + ( pay off of B x probability of B)

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7
Q

Net gain

A

expected value - initial cost of decision

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8
Q

Market size volume

A

quantity of goods and services produced in a particular market over a period of time ( usually one year)

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9
Q

market size value

A

total sales revenue generated from selling all of the goods and services produced by a particular market over a period of time

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10
Q

sales volume

A

quantity of goods and services produced by a particular business over a period of time (usually one year)

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11
Q

sales value

A

total sales revenue of a particular business over a period of time

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12
Q

market growth (%)

A

change in market size/ original market size X 100

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13
Q

sales growth

A

change in product sales/ previous sales of product or business X 100

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14
Q

market share

A

sales of one product/brand/business % total market sales X 100

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15
Q

Price elasticity of demand

A

percentage change in quantity demanded % percentage change in price X 100

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16
Q

price inelastic demand coefficient range

A

less than 1

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17
Q

price elastic demand coefficient range

A

greater than 1

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18
Q

Added value

A

sales revenue - cost of bought in goods and services

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19
Q

Labour productivity

A

output per time period % number of employees

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20
Q

Unit costs

A

total costs of production % number of units of output produced

21
Q

Capacity utilisation

A

actual output in a given time period % maximum possible output in a given time period X 100

22
Q

Return on investment

A

return on investment (£) % cost of investment (£) X 100

23
Q

Gross profit

A

Sales revenue - cost of sales

24
Q

Profit from operations = operating profit

A

sales revenue - cost of sales - operating expenses

25
Q

Profit for the year

A

operating profit + profit from other activities - net finance costs - tax

26
Q

Variance

A

the difference between an actual and budgeted figure

27
Q

Favourable variance

A

actual sales or products that are higher than budget or costs are lower than budget

28
Q

Adverse variance

A

actual sales or profits are lower than budget or costs are higher than budget

29
Q

Contribution per unit

A

selling price - variable costs per unit

30
Q

Total contribution per unit

A

contribution per unit X units produced or sold
OR
total revenue - total variable costs

31
Q

Break even output

A

fixed costs / contribution per unit

32
Q

on a break even chart, what is the break even output?

A

level of output at which total revenue = total costs

33
Q

on a break even chart, what is the level of profit at a given level of output?

A

vertical distance between the total revenue line and the total cost line

34
Q

What is the margin of safety

A

actual level of output - breakeven level of output

35
Q

Gross profit margin

A

gross profit/sales revenue X 100

36
Q

Operating profit margin

A

operating profit/sales revenue X 100

37
Q

profit for the year margin

A

profit for the year/sales revenue X 100

38
Q

labour turnover

A

number of staff leaving during the year

39
Q

employee retention rate (%) for a particular time period

A

number of staff leaving during the year % average number of staff employed by the business during the year X 100

40
Q

employee costs as a percentage of turnover

A

employee costs % sales turnover X 100

41
Q

labour cost per unit

A

labour costs % units of output

42
Q

ROCE %

A

operating profit / total equity + non current liabilities X 100

43
Q

current ratio

A

current assets / current liabilities

44
Q

gearing %

A

non current liabilities / total equity + non current liabilities X 100

45
Q

payables days

A

payables / cost of sales X 365

46
Q

recievable days

A

recievables / revenue X 100

47
Q

inventory turnover

A

cost of goods sold / average inventories held

48
Q

average rate of return %

A

net return from project or number of years / initial cost of project X 100

formulas (1 decks)

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