Formulas Flashcards
Total Costs
Fixed Costs + Variable Costs
Profit
Total Revenue - Total Costs
OR
Total Contribution - Fixed Costs
Variable Costs
Variable cost per unit × Number of units sold
Total Revenue
Selling price per unit × Number of units sold
Market Capitalisation
Number of issued shares × Current share price
Expected value of a decision with two possible outcomes - A & B
Pay-off of A × probability of A + Pay-off of B × probability of B
N.B. Probability of A + Probability of B = 1.0
In a decision tree Net gain
Expected value - Initial cost of decision
Market size - volume
is the quantity of goods and services produced in a
particular market over a period of time usually one year .
Market Size value
Isthe total sales revenue generated from selling all of the
goods and services produced in a particular market over a period of time
usually one year .
Sales Volume
is the quantity of goods and services produced by a particular
business over a period of time usually one year .
Sales value
is the total sales revenue of a particular business over a period of
time usually one year .
Market growth % in year’X’
Change in the size of the market between year X-1 and year X
Size of the market in year (X-1) × 100
Sales growth % in year’X’
Change in sales of product or business between year X-1 and year X
Sales of product or business in year (X-1) × 100
Market share %
Sales of one product OR brand OR business
Total sales in the market × 100
Price elasticity of demand
Percentage change in quantity demand
Percentage change price
Added value value added
Sales revenue-costs of bought-in goods and services.
Labour productivity
Output per time period
Number of employees
Unit costs average costs
Total costs of production
Number of units of output produced
Capacity utilisation %
Actual output in a given time period
Maximum possible output in a given time period
× 100
Return on investment %
Return on investment (£)
Cost of the investment (£)
×100
Gross Profit
Sales Revenue - Cost of Sales
Profit from Operations
Sales Revenue - Cost of Sales - Operating Expenses
Profit for year
Operating profit + Profit from other activities - Net finance costs -Tax
Variance
The difference between an actual and a budgeted figure.
Contribution per unit
Selling price - Variable costs per unit
Total contribution
Contribution per unit × Units produced or sold
OR
Total revenue - Total variable costs
Break-even output
Fixed costs
Contribution per unit
Margin of safety
Actual level of output - Breakeven level of output
Gross profit margin %
Gross profit
Sales revenue
× 100
Operating profit margin
Operating profit
Sales revenue
× 100
Profit for year margin
Profit for year
Sales revenue
× 100
Labour turnover
Number of staff leaving during the year
Average number of staff employed by the business during the year
Employee retention rate % for a particular time period
Number of employees at end of period-number of leavers
Number of employees at end of period
×100
Employee costs as percentage of turnover
Employee costs
Sales turnover
× 100
Labour cost per unit
Labour costs
Units of output
Return on capital employed ROCE %
Operating profit
Total equity + non-current liabilities
× 100
