Mathematic Equations Flashcards
Total costs
Fixed cost + variable cost
Profit
Revenue - total cost
Variable cost
Variable cost per unit x number of units sold
Revenue
Selling price per unit x number of units sold
Market capitalisation
Number of issued shares x current share price
Expected value
(Pay-off A x prob A) + (pay-off B x prob B)
Net gain
Expected value - initial cost
What is market size volume?
The quantity of product produced in a particular market is a period of time
What is market size value?
The total sales revenue generated from selling all of the goods and services produced in a particular market
Market growth
%
(Change/current) x 100
Sales growth
%
(Change/current) x 100
Market share
%
(Sales of individual/sales of market) X 100
PED
(Percentage change in quantity demanded/percentage change in price) X 100
Added value
Sales revenue - cost of bought in product
Labour productivity
Output / number of employees
Unit cost
Total cost of production / output produced
Capacity utilisation
%
(Actual output / maximum output) x 100
Return on investment
%
(Return / cost) x 100
Gross profit
Revenue - cost of sales
Operating profit
Revenue - (cost of sales + indirect costs)
Profit for the year
Total profit - (net finance cost - tax)
Define variance
The difference between actual and budgeted figure
Define favourable variance
Figures favourable to the business
Hi sales or profits, lower costs
Define adverse variance
Figures harmful to the business
Lower sales or profit, higher costs
Contribution per unit
Selling price - variable cost per unit
Total contribution 2
Contribution per unit x units produced or sold
Total revenue - total variable cost
Break-even output
Fixed cost / contribution per unit
What is break-even output on a break-even chart?
When revenue equals cost
Margin of safety
Actual level of output - breakeven level of output
Gross profit margin
%
(Gross profit / sales revenue) x 100
Operating profit margin
%
(Operating profit / sales revenue) x 100
Profit for the year margin
%
(Profit for the year / sales revenue) x 100
Labour turnover
%
(Number of staff leaving during the year/ average staff employed during the year) x 100
Employee retention rate
%
(Number of staff who stay the whole time during the year/ staff employed during the year) x 100
Employee costs as a % of turnover
(Employee cost / sales revenue) x 100
Labour cost per unit
Labour cost / units of output
ROCE
%
(Operating Profit / capital employed) x 100
Capital employed
Total equity + non-current liabilities
Current ratio
Current assets / current liabilities
Gearing
%
Non-current liabilities / capital employed
Payables (creditors) days
(Payables / cost of sales) x 365
Receivables (debtors) days
(Receivables / sales revenue) x 365
Inventory turnover
Cost of goods sold / average inventories held
Average rate of return
%
((Net return of profit/number of years) / initial cost of project) x 100
