Key Business formulae Flashcards
What do the values of PeD show
Price inalstic = 0 to -1
Price elastic = -1 to infity
Variable costs (total variable costs)
Variable cost per unit x number of units sold
Total revenue (sales revenue or turnover)
Selling price per unit x number of units sold
Total costs
fixed cost + variable cost
Profit
total revenue-total cost
or
total contributions- fixed costs
Market capitalisation of a business
Number of issued shares x current share price
in a decision tree how do you calculate net gain
Expected value- initial cost of decision
how do you calculate Variance
the difference between an actual and a budgeted figure
how do you calculate Unit cost
Total cost of production / Number of units of output produced
how do you calculate Total contribution
Cotirbuition per unit x Units produced/sold
Or
Total revennue- total variable costs
How do you calculate Sales Growth (%) in year X
Change in sales of product/ sales of product x 100
how do you calculate Return on investment (%)
Return on investment / cost of investment x 100
How do you calculate Return on capital employeed (ROCE)
(Operating profit
/total equity + non current Liabilities) x 100
How do you calculate Recievable days
Recievables / sales revevenue x 365
how do you calculate Re-order quantity
Lead time (in days) x Average daily usage
how do you calculate Re-order level
re-order quantity + Minimum inventory level
