L3 BTEC Business- Unit 3 Formulas Flashcards
Profit
total revenue - total costs
Gross Profit
sales revenue - costs of goods sold
Sales Revenue
quantity sold x price per unit
Net Profit
gross profit - other expenses
Closing balance
opening balance + net cash flow
Opening balance
previous months’ closing balance
Total cash available
opening balance + total inflows
Net cash flow
total inflows - total outflows
Break even
fixed costs / contribution per unit
Contribution per unit
price per unit - variable cost per unit
Margin of safety
actual sales - Break even point
Profit for the year
revenue - cost of sales - expenses
Profit (using contribution)
contribution per unit x margin of safety
Total contribution
sales revenue - total variable costs
Total variable cost
variable cost per unit x quantity sold
Total costs
fixed costs + variable costs
Cost of goods sold
(opening inventories + purchases) - closing inventories
Straight line depreciation
(historic value - residual value) / expected life
Reducing balance depreciation
original value x (% value that remains x^ no. years)
Net book value
cost - depreciation
Net current assets (aka working capital)
current assets - current liabilities
Net assets
total assets = total liabilities
Capital employed
(owner’s capital + retained profit) - drawings
Capital employed (2)
non-current liabilities + total equity
Balance sheet
net assets = capital employed
Gross profit margin
(gross profit / sales revenue) x 100
Mark-up
(gross profit / cost of sales) x 100
Net profit margin
(net profit / revenue) x 100
Return on capital employed (ROCE)
(net profit before interest and tax / capital employed) x 100
Current ratio
current assets / current liabilities
Liquid capital ratio
(current assets - inventory) / current liabilities
Trade receivable days
(trade receivables / credit sales) x 365
Trade payable days
(trade payable / credit purchase) x 365
Inventory turnover
(average inventory / cost of sale) x 365
Average inventory
(opening inventory + closing inventory) / 2
