formulas for business Flashcards
profit
profit =revenue - costs
total costs
total costs = fixed costs + variable costs
percentage change
percentage change = (final value - initial value ) / initial value x 100
percentage growth
percentage growth = (change in sales / existing sales ) x 100
market share
market share = (sales of business / total market sales ) x 100
market capitalisation
market capitalisation = number of shares x share price
PED
PED = %change in demand / %change in price
YED
YED = %change in demand / %change in income
contribution
contribution = sales revenue - variable costs
contribution per unit
contribution per unit = sales price per unit - variable costs per unit
breakeven
breakeven = fixed costs / contribution per unit
labour turnover
labour turnover =( number of staff leaving per year / average number of staff ) x 100
labour retention
labour retention = number of employees with one or more years of service / overall workforce numbers
labour productivity
labour productivity = total output / number of employees
labour costs as a % of turnover
(labour costs / revenue ) x 100
labour cost per unit
labour cost per unit = labour costs / output
gross profit
(revenue or sales) - (cost of sales or variable costs
operating profit
gross profit - fixed costs
net profit or profit of the year
(operating profit - tax) +- interest
expected value (decision trees)
EV = (probability x outcome 1) + (probability x outcome 2)
current ratio
current ratio = current assets / current liabilitiesgr
gearing ratio
gearing ratio = (non current liabilities / capital employed) x 100
capital employed
capital employed = total equity + non-current liabilities
profit margin
profit margin =( profit / revenue ) x 100
return on capital employed
ROCE = (operating profit / capital employed) x 100
inventory turnover ratio
costs of sales / inventory( number of per year stock is replenished)
receivables days ratio
(trade receivables / revenue) x 365
payables days ratio
(trade payables / cost of sales) x 365
payback
number of full years + (the amount of cost left / the revenue generated the next year )
average rate of return
net return = total net cash flows - initial outlay
average annual return = net return / life expectancy
average rate of return = (average annual return / initial outlay ) x 100
net present value
net cash flow x discount factor
net gain
ev - costs
balance sheet format
non-current assets
current assets
current liabilities
net current liabilities
non-current liabilities
net assets (same)
total equity (same)
