Formulas- Finance Flashcards
Return on Investment (%)
Return on investment/ cost of investment x 100
Percentage change in Profit (%)
(Current year’s profit- previous year’s profit)/ previous year’s profit x 100
Gross Profit
Sales revenue- cost of sales
Gross Profit Margin (%)
Gross Profit/ sales revenue x 100
Operating Profit
Sales revenue - cost of sales - operating expenses
Operating Profit Margin (%)
Operating Profit/ sales revenue x 100
Profit for the year
Operating profit + other profit - net finance costs - tax
Profit for the Year Margin
Profit for the year/ sales revenue x 100
Net Cash Flow
Cash inflows - Cash outflows
Closing Balance
Opening balance + net cash flow
Contribution per unit
Selling price per unit - variable costs per unit
Total Contribution
Total revenue - total variable costs
Or
Contribution per unit x number of units sold
Break-even Output
Fixed costs/ Contribution per unit
Margin of Safety
Actual output - break-even output
