Formulas Flashcards
Revenue (Sales or Turnover)
Selling price per unit x number of units sold
Variable costs (total variable costs)
Variable cost per unit x number of units sold
Total costs
fixed costs + variable costs
Profit
total revenue - total cost
Market capitalisation of a business
Number of issued shares x current share price
Added value
Sales revenue - costs of bought in goods and services
Labour productivity
Output per time period / number of employees
Unit costs (average costs)
Total costs / number of units of output
Return on investment (%)
Profit from investment / cost of investment x 100
Gross profit
Revenue - cost of sales
Profit from operations
gross profit - operating expenses
Profit for year
Operating profit + profit from other activities - net finance costs - tax
Gross profit margin (%)
Gross profit/sales revenue x 100
Profit from operations margin
Operating profit / revenue x 100
Profit for year margin(%)
profit for the year/revenue x 100
Variance
budgeted figure - actual figure
Contribution per unit
Selling price - variable cost per unit
Total contribution
Contribution per unit x number of units sold
Break even output
Fixed costs / contribution per unit
Employee costs as a percentage of turnover
Employee costs / sales turnover x 100
Labour costs per unit
Labour costs / units of output
Return on capital employed
operating profit / total equity + non current liabilities x 100
Labour turnover (%)
Number of staff leaving / number of staff employed by the business x 100
Current Ratio
current assets / current liabilities
Gearing %
Non-current liabilities / Total Equity + Non-current liabilities x 100
Payables days
payables/cost of sales x 365
Receivable days
Receivables / sales revenue x 365
Average rate of return (%)
Average annual return / initial cost of project x 100
Gross Profit
net sales - cost of goods sold
operating profit
Gross Profit - Expenses
Gross Profit Margin
Gross profit/sales revenue x 100
Net Profit Margin
Net profit/sales revenue x 100
Current Ratio
current assets divided by current liabilities
ROCE ratio
Operating profit / capital employed x 100
Gearing ratio
non-current liabilities/capital employed x 100
Payable Days Formula
(Payables / cost of sales) x 365
Receivable days
Receivables / sales revenue x 365
Inventory Turnover Ratio
cost of goods sold/average inventory
Capital employed
Total equity + non current liabilities
Total equity
Retained profit + share capital
Net gain
Expected value - initial cost of decision
Capacity utilisation (%)
actual output / maximum possible output x 100
margin of safety
Actual output - break even output
Employee retention rate (%) for a particular time period
Number of employees who remained with the business for the whole period of time / Number of employees at start of time period x 100
Inventory turnover
cost of sales / average inventory held
Cost of Goods Sold
beginning inventory + purchases - ending inventory
