MBA - KEY TERMS Flashcards
Formula for sales revenue
Price x Quantity
Formula for total cost
Fixed cost + Variable cost
Formula for variable cost
Total cost - Fixed costs
Formula for profit
Total revenue - Total costs
Formula for contribution per unit
Selling price - Variable costs
Formula for break even using TR
TR = TC
Formula for break even using contribution
Total sales / (FC - SP)
Formula for margin of safety
Actual output - Break even output
Formula for net cash flow
Cash inflow - Cash outflow
Formula for opening balance
Closing balance of the previous month
Formula for closing balance
Net cash flow + Opening balance
Formula for percentage change
Original / Difference x 100
Formula for revenue variance
Actual revenue - Budget revenue
Formula for cost variance
Actual costs - Budget costs
Formula for profit variance
Actual profit - Budget profit
Formula for unfavourable variance
- Revenue - Costs
- Brev > Arev
- Acost > Bcost
Formula for favourable variance
- Revenue - Costs - Profit
- Arev > Brev
- Bcost > Acost
- Aprofit > Bprofit
Formula for gross profit
Total revenue - Cost of sales
Formula for operating profit
Gross profit - Overheads
Formula for net profit
Operating profit - Tax and Interest
Formula for gross profit margin
Gross profit / Total revenue x 100
Formula for operating margin
Operating profit / Total revenue x 100
Formula for net profit margin
Net profit / Total revenue x 100
