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Business A-level > Formulas > Flashcards

Formulas Flashcards

All the formulas needed in Business A-Level

1
Q

Formula for Revenue (sales or turnover)

A

Selling price per unit x Number of units sold

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2
Q

Formula for Variable costs (total variable costs)

A

Variable cost per unit x Number of units sold

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3
Q

Formula for Total costs

A

Fixed costs + Variable costs

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4
Q

Formula for Profit

A

Total revenue - Total costs
OR
Total contribution - Fixed costs

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5
Q

Formula for Market capitalisation of a business

A

Number of issued shares x Current share price

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6
Q

Formula for Expected value of a decision with two possible outcomes

A

A & B =
[Pay-off of A x Probability of A] + [Pay-off of B x Probability of B]

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7
Q

Formula for Net gain

A

Expected value - Initial cost of decision

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8
Q

Formula for Market Growth (%)

A

[Change in the size of the market over a period ÷ Original size of the market] x 100

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9
Q

Formula for Market Share (%)

A

[Sales of one product OR brand OR business ÷ Total sales in the market] x 100

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10
Q

Formula for Added Value

A

Sales revenue - Costs of brought-in goods and services

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11
Q

Formula for Labour productivity

A

Output over a time period ÷ Number of employees

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12
Q

Formula for Unit costs (average costs)

A

Total costs ÷ Number of units of output

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13
Q

Formula for Capacity utilisation (%)

A

[Actual output ÷ Maximum possible output] x 100

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14
Q

Formula for Return on investment (ROI) (%)

A

[Profit from the investment (£) ÷ Cost of the investment (£)] x 100

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15
Q

Formula for Gross profit

A

Revenue - Cost of sales

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16
Q

Formula for Profit from operations

A

Operating profit =
Gross profit - Operating expenses

17
Q

Formula for Profit for the Year

A

[Operating profit + Profit from other activities] - [Net finance costs + Tax]

18
Q

Formula for Gross profit margin (%)

A

[Gross profit ÷ Revenue] x 100

19
Q

Formula for Profit from operations margin (%)

A

Operating profit margin =
[Operating profit ÷ Revenue] x 100

20
Q

Formula for Profit for the year margin (%)

A

[Profit for year ÷ Revenue] x 100

21
Q

Formula for Variance

A

Budgeted figure - actual figure

22
Q

Formula for Contribution per unit

A

Selling price - Variable costs per unit

23
Q

Formula for Total contribution

A

Contribution per unit x Units sold
OR
Total revenue - Total variable costs

24
Q

Formula for Break-Even output

A

Fixed costs ÷ Contribution per unit

25
Q

Formula for Margin of safety

A

Actual level of output - Break-even level of output

26
Q

Formula for Labour turnover (%)

A

[Number of staff leaving ÷ Number of staff employed by the business] x 100

27
Q

Formula for Employee retention rate (%) for a particular time period
*possibly been removed from spec

A

[Number of employees who remained with the business for the whole period of time ÷ Number of employees at start of the time period] x 100

28
Q

Formula for Employee costs as a percentage of turnover

A

[Employee costs ÷ Turnover] x 100

29
Q

Formula for Labour cost per unit

A

Labour costs ÷ Units of output

30
Q

Formula for Return on capital employed (ROCE) (%)

A

[Operating profit ÷ [Total equity + non-current liabilities]] x 100
*where total equity + non-current liabilities = capital employed

31
Q

Formula for current ratio

A

Current assets ÷ Current liabilities

32
Q

Formula for Gearing (%)

A

[Non-current liabilities ÷ [Total equity + non-current liabilities]] x 100
*where total equity + non-current liabilities = capital employed

33
Q

Formula for Payables days

A

[Payables ÷ Cost of sales] x 365

34
Q

Formula for Receivables days

A

[Receivables ÷ Revenue] x 365

35
Q

Formula for Inventory turnover

A

Cost of sales ÷ Average inventories held

36
Q

Formula for Average rate of return (%)

A

[Average annual return (£) ÷ Initial cost of project (£)] x 100

Business A-level (1 decks)

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