Formulas Flashcards
Component 1:
Market growth=
(Change/original) x 100
Component 1 & 2:
Percentage change=
(Change/ original) x 100
Component 1&2:
Price elasticity of demand=
Percentage change in demand/ percentage change in price
Component 1&2:
Income elasticity of demand=
Percentage change in demand/ percentage change in income
Component 1:
Total costs=
Total fixed costs + total variable costs
Component 1:
Total revenue=
Selling price x number of units sold
Component 1:
Profit=
Total revenue - total cost
Or (using contribution)
Total contribution- total fixed costs
Component 1:
Total costs per unit=
Total cost/ number of units
Component 1&2:
Unit contribution=
Selling price - unit variable costs
Component 1&2:
Total contribution=
Unit contribution x number of units
Or
Total revenue- total variable costs
Component 1:
Breakeven=
Total fixed costs/ unit contribution
Component 1:
Margin of safety=
Actual sales - breakeven point
(It must be a positive number)
Component 1:
Net cash flow=
Cash inflows- cash outflows
Component 1:
Opening balance=
Closing balance from the previous period
Component 1:
Closing balance=
Opening balance + net cash flow
Component 1&2:
Budget variance=
Actual - budget
(It’s the difference between them)
Component 1&2:
Adverse variance=
Bad for the business, resulting in worse than expected profits
Component 1&2:
Favourable variance=
Good for the business, resulting in higher than expected profits
Component 1&2:
Cost of sales=
(Opening stock +purchases)- closing stock
Component 1&2:
Gross profit=
Revenue- cost of sales
Component 1&2:
Net profit=
Gross profit- expenses
Component 1&2:
Gross profit margin=
(Gross profit/ revenue) x100
Component 1&2:
Net profit margin=
(Net profit/ revenue)x 100
Component 1&2:
Return of capital employed=
(Profit/ capital invested) x100
Component 1:
Added value=
Selling price -cost of materials
Component 1:
Labour productivity=
Total output/ number of employees
Component 1:
Capital productivity=
Total output /capital employed
Component 1:
Capacity utilisation=
(Actual output/ maximum output) x100
Component 1:
Labour turnover =
(Number of employees leaving/ total number of employees) x100
Component 2:
Pie charts=
Work out percentage-
(Value of that category/ total value of all categories) x100
Work out the degree-
(360/100) x categories percentage
Component 2:
Histograms (frequency density)=
Frequency/ class width
Or
Number of occurances/ range in interval (width of the bar)
Component 2:
Correlation=
Measures the relationship between two variables with the use of a scatter graph and line of best fit
Component 2:
Correlation -positive=
Points are closely gathered around the line and slopes up
Component 2:
Correlation- negative=
Points are closely gathered around the line slopes down
Component 2:
Index numbers=
(Value in period to be converted/ value in base year) x 100
Component 2:
Moving averages=
Take the first three numbers / 3 , etc
Component 2:
Extrapolation=
Uses line of best fit on a graph to extent beyond the known variables to predict or forecast the future
Component 2:
Retained profit=
Net profit or profit for the year- tax and dividends
Component 2:
Working capital=
Current assets- current liabilities
Component 2:
Net assets=
(Non current assets + working capital ) -non current liabilities
Component 2:
Shareholder funds/ total equity=
Share capital + reserves and retained earnings
Component 2:
Capital employed =
Shareholders funds + non current liabilities
Component 2:
Non current assets=
Fixed assets
Component 2:
Non current liabilities =
Long term liabilities
Component 2:
Trade receivables=
Debtors
Component 2:
Trade payables =
Creditors
Component 2:
Net current assets=
Working capital
Component 2:
Depreciation =
(Initial cost- residual value)/ expected life No. years
Or
A fixed percentage of the original cost
Component 2:
Net book value (NBV)=
Initial cost- total deprecation to date
Component 2:
Current ratio=
Current assets/ current liabilities
Component 2:
Acid test ratio=
(Current assets - stock)/ current liabilities
Component 2:
Gearing=
(Long term liabilities/ capital employed) x 100
Component 2:
Payback period=
Add together each years net cash flow until initial cost is recovered
Component 2:
Payback to calculate months=
(Amount needed from the year/ amount available in the year) x12
Component 2:
Average rate if return (%)=
((Average net return -profit per annum)/ initial cost) x100
Component 2:
Present value=
Expected net cash flow x appropriate discount factor
Component 2:
Net present value=
Total of present values - capital outlay or initial cost
Component 2:
Decision trees: actual value or predicted (actual) profit or loss=
The amount you expect to receive if a particular course or route is followed
Component 2:
Decision trees: expected monetary value(EMVs) =
•Weighted average of the likely return allowing for particular decisions to be made and the probability of a specific outcome occurring
•work backwards,multiply actual value by probability of the event occurring, at circles add these together, at squares take off any cost then choose the highest one
Component 2:
Critical path analysis: total float=
LFT- duration- EST
(Work backwards)
Component 2:
Critical path analysis: Free float=
EST- duration- EST
(Work backwards)
Component 2:
Cost benefits analysis: social costs=
Negative externality (public cost)+ the private cost
Component 2:
Cost benefit analysis: social benefits=
Positive externality (public benefit) + the private benefit
Component 1:
Market size=
Total number of sales in the whole market (volume)
Or
Total revenue in the whole market (value)
Market share
(Sales from one business/total market) x 100
