formulas themse 2 Flashcards
What is the formula for Net Cash Flow?
Net Cash Flow = Total Cash Inflow - Total Cash Outflow
This formula measures the cash generated or consumed over a specific period.
How is the Opening Balance calculated?
Opening Balance = Closing Balance from previous period
The Opening Balance indicates the amount of cash available at the start of a new period.
What is the formula for Closing Balance?
Closing Balance = Opening Balance + Net Cash Flow
This represents the total cash available at the end of the period.
What is the formula for Sales Revenue?
Sales Revenue = Price × Quantity Sold
This calculates the total income from sales during a period.
How is Total Costs calculated?
Total Costs = Total Fixed Costs + Total Variable Costs
This reflects the overall costs incurred in producing goods or services.
What is the Breakeven formula?
Breakeven = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
This determines the sales volume needed to cover costs.
What does Contribution per Unit represent?
Contribution per Unit = Selling Price per Unit - Variable Cost per Unit
This indicates the amount each unit contributes to covering fixed costs.
How is Total Contribution calculated?
Total Contribution = Contribution per Unit × Quantity Sold
This measures the total contribution towards fixed costs and profit.
What is the formula for Profit?
Profit = Total Revenue - Total Costs or Total Contribution - Fixed Costs
This indicates the net earnings after all expenses.
How is Variance defined?
Variance = Actual figure - Budgeted figure
This measures the difference between expected and actual performance.
What is the formula for Gross Profit?
Gross Profit = Sales Revenue - Cost of Sales
This reflects the profit before deducting operating expenses.
How is Operating Profit calculated?
Operating Profit = Gross Profit - Other Operating Expenses (Overheads or Fixed Costs)
This indicates the profit from core business operations.
What is Net Profit?
Net Profit = Operating Profit - Finance costs and tax
This represents the final profit after all expenses and taxes.
What are Profit Margins?
Profit Margins = (Gross, Operating or Net Profit) / Sales Revenue × 100
This measures profitability as a percentage of sales.
What is the formula for Current Ratio?
Current Ratio = Current Assets / Current Liabilities
This assesses a company’s ability to pay short-term obligations.
How is Acid Test Ratio calculated?
Acid Test Ratio = (Current Assets - Inventories) / Current Liabilities
This measures liquidity by excluding inventory from current assets.
What does Productivity measure?
Productivity = Output / Inputs per Time Period
This indicates the efficiency of production processes.
How is Capacity Utilisation calculated?
Capacity Utilisation = (Current or Actual Output / Maximum Possible Output) × 100
This measures the extent to which production capacity is being used.
