Numeracy and quantitative skills Flashcards
Break-even - Output
Break-even output = fixed costs/contribution
Break-even - Margin of safety
The margin of safety = current output - break-even output
Capacity Utilisation
(Actual output / Maximum possible output) × 100
Contribution
Selling price − variable costs
Total Costs
Fixed costs + Variable costs
Variable costs
Variable cost per unit × Number of units sold
Investment appraisal - ARR
Average annual return / Initial cost (£) × 100
Investment appraisal - NPV
Present Value – cost of investment
Labour - Costs per unit
Labour costs / Units of output
Labour - Employee cost as a percentage of turnover
Employee costs / Turnover
× 100
Labour - Employee retention rate
Current number of employees /Number of employees at the start of the time period ×100
Labour Productivity
Output / Number of employees
Labour turnover
Number of staff leaving / Number of staff employed by the business × 100
Market capitilisation
Number of issued shares × Current share price
Market growth rate
Change in the size of the market over a period / Original size of the market × 100
Market share
Sales of one product OR brand OR business / Total sales in the market × 100
Gross Profit
Revenue − Cost of Sales
Operating Profit
Gross profit − Operating Expenses
Capital employed
Total equity + non-current liabilities
Gearing
Non-current liabilities/ Cap employed x100
Gross Profit margin
Gross Profit / Revenue
× 100
Inventory turnover
Cost of sales / Average inventories held
Operating profit margin
Operating Profit / Revenue
× 100
Payable days
Payables / Cost of sales × 365
Profit for the year margin
Profit for year / Revenue
× 100
Receivable days
Receivables/Revenue × 365
Return on investment
Profit from the investment (£) /Cost of the investment (£) × 100
Unit costs
Total costs / Number of units of output
Variances
Budgeted figure – the actual figure
Profit
Total revenue − Total costs
Revenue (Sales or turnover)
Selling price per unit × Number of units sold
ROCE
Operating profit / Capital employed x100
Operating profit
Sales Revenue - Cost of Sales - Operating Expenses
