KEY EQUATIONS Flashcards
Absenteeism
Total days absent in the month X100 / Total available working days in the month
Lateness
Total number of late arrivals X100/ Total numbers of scheduled attendances
Productivity
Output/ Average number of employees
Labour Turnover
Number of employees leaving during the year/ Average number employed during the year X100
Market Share
Sales / Total market sales X100
Market Growth
Change in sales / Original sales X100
Price Elasticity of Demand
% change in demand / % change in price
Income Elasticity of Demand
% change in demand / % change in income
Cross Elasticity of Demand
% change in demand for A / % change in price of B
Advertising Elasticity of Demand
% change in demand/ % change in advertising
Return on Capital Employed (ROCE)
Profit before Tax and Interest / Long term Capital Employed
X100
Gross Profit Margin
Gross profit / Turnover
X100
Net Profit Margin
Net profit / Turnover
X100
Asset Turnover
Turnover / Net Assets
Stock Turnover
Cost of Sales / Stock
Debtor Collection Period
Debtors / Turnover
X365
Creditor payment period
Creditors / Cost Of Sales
X365
Current Ratio
Current assets/ Current liabilities
Acid Test Ratio
Current assets- stock/ Current liabilities
Gearing Ratio
Fixed cost capital / Long term capital
X100 for a %
Interest Cover
Profit before tax and interest / interest
Earnings per Share (EPS)
Profit after Tax / Number of ordinary shares
How much profit each share generates
Price Earnings Ratio
Share price / EPS
The number of times the share price can be divided by the EPS, higher the better
Dividend per Share
Dividend / Number of shares
how much dividend received per share
Dividend Yield
Dividend per share / Share price
Dividend per share as a % of the share price
Dividend Cover
Profit after Tax / Dividends
How many times dividends can be paid from net profits
ARR ( average rate of return)
Average Profit / Capital Outlay
average profit = Total Revenue - Capital outlay/ Lifetime
Pay Back
Remaining to pay/ revenue
X12 .
