formulas for business Flashcards
Revenue
Revenue : Quantity sold x Price
Productivity
Productivity : Output / Quantity of input
Labor Productivity
Labor Productivity : Output / Number of employees
Working Capital
Working Capital : Current Assets – Current Liabilities
Capital Employed ( or Shareholder’s funds )
Capital Employed ( or Shareholder’s funds ): Total Assets – Total Liabilities
Profit 2
Profit : Revenue – Cost of sales
Profit (from break even graph)
Profit ( from Break even graph ) : Total Revenue – Total Costs
Total costs
Total Costs : Fixed Costs + Variable Costs or FC + VC
Average cost
Average Cost : Total Costs / Total Number of units produced
Break even point
Break even point : Fixed costs / Contribution per unit or FC / ( Selling Price – Variable Cost )
Contribution per unit
Contribution per unit : Selling price – Variable costs
Margin of safety
Margin of safety : Maximum output – Break even output
Gross profit
Gross profit : Revenue – Cost of sales ( or Variable costs )
Gross profit margin
Gross profit margin : Gross profit / Revenue x 100
Net profit
Net profit : Gross profit – Expenses ( or Fixed costs )
Net profit margin
Net profit margin : Net profit / Revenue x 100
Return on capital employed
Return on Capital Employed : Net profit / Capital Invested x 100
Current ratio
Current ratio : Current Assets / Current liabilities
Acid test ratio
Acid Test Ratio ( or Quick Ratio ) : Current Assets – Inventory ( or Stock ) / Current Liabilities
Net cash flow
Cash inflows - cash outflows
Closing balance
closing balance = net cash flow + opening balance.
