Formulas Flashcards
Total Costs
Fixed Costs (FC) + Variable Costs (VC)
Current ratio
Current Assets / Current Liabilities
Profit
Total revenue - Total costs
YED
% change in quantity demanded / % change in income
PED
% change in quantity demanded / % change in price
Acid test ratio
Current Assets – Stock/Current liabilities
Total contribution 2
Total contribution = Total revenue – Total variable costs
Variance
Variance = Difference between the actual and the budgeted figure.
Net profit margin
(Profit for the year / Sales revenue) x 100
Operating profit
Gross profit – fixed costs
Gross profit margin
(Gross profit / Sales revenue) x 100
Market Growth (%)
(Change / Original) x 100
Operating profit margin
(Operating profit/ Sales revenue) x 100
Budget Variance
Actual - Budgeted
Productivity
Output/Input (e.g. number of employees)
Margin of safety
Actual level of goods produced/output – breakeven level of goods produced/output
Capacity Utilisation (%)
Actual Output / Maximum Possible Output x 100
Contribution per unit
Selling price – variable cost per unit
Break-even output
Break even output = fixed costs/contribution per unit
This is shown graphically where total revenue = total costs
Gross Profit
Total revenue - variable costs
Total revenue
Selling Price per unit x Number of Units sold
Total contribution 1
Total contribution = Contribution per unit x units produced or sold
Total Variable Costs
Variable Cost per Unit x Number of Units Sold
Where the actual revenue is higher than the budgeted revenue, this is a ________ variance.
Where the actual revenue is lower than the budgeted revenue, this is an ________ variance.
Where the actual figure is higher than the budgeted figure, this is a favourable variance.
Where the actual figure is lower than the budgeted figure, this is an adverse variance.
Market Share (%)
Sales of one product OR brand OR business / Total sales in that market x 100
Monthly Balance (Cash-flow forecasting)
Cash inflow for the month - cash outflow for the month
Closing Balance (Cash-flow forecasting)
Opening balance + monthly balance
