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Business Studies > Paper 2 : Equations > Flashcards

Paper 2 : Equations Flashcards

1
Q

Formula for Net Cash Flow in a cash flow forecast

A

Net cash flow= cash inflow –cash outflow

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2
Q

Formula for sales revenue

A

Sales revenue = selling price x sales volume

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3
Q

Formula for sales volume

A

sales volume = rales revenue / selling price

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4
Q

Formula for total costs

A

Total costs = fixed costs + variable costs

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5
Q

Formula for total variable costs

A

Total costs - fixed costs
or
average variable costs x output

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6
Q

Formula for average variable costs

A

variable costs / output

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7
Q

Formula for Breakeven

A

Break- even = total fixed costs / contribution per unit

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8
Q

Formula for contribution per unit

A

Contribution per unit = selling price – variable costs per unit

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9
Q

Formula for total contribution

A

contribution per unit x number of units sold

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10
Q

Formula for total profit

A

Total profits = contribution – fixed costs

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11
Q

Formula for margin of safety

A

Margin of safety = actual output – break even point

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12
Q

Formula for profit budgets

A

Profit budgets = income budget figures - expenditure budget figures

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13
Q

Formula for variance

A

Variance = actual figure – budgeted figure

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14
Q

Formula for the 3 types of profit

A

Gross profit =Total revenue – costs of sales
Operating profit = gross profit – other operating expenses
Net profit = operating profit - interest

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15
Q

The formula for the three profit margins

A 
GPM = gross profit / revenue x100
OPM = operating profit / revenue x100
NPM = net profit / revenue x 100
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16
Q

Formula for current ratio

A

Current ratio = current assets ÷ current liabilities

17
Q

formula for Acid Test Ratio

A

Acid test ratio = (current assets – inventory) ÷ current liabilities

18
Q

Formula for working capital

A

current assets - current liabilities s

19
Q

Formula for productivity

A

output per period / input per period

20
Q

Formula for capital productivity and labour productivity

A

CAPITAL PRODUCTIVITY = OUTPUT PER TIME PERIOD/NO. MACHINES
LABOUR PRODUCTIVITY = OUTPUT PER TIME PERIOD
NO. WORKERS/HOURS WORKED

21
Q

Formula for capacity utilisation

A

capacity utilisation = current output / maximum output x100

22
Q

The 2 formulas used to work out the average basket value

A

Index number = (𝑎𝑣𝑒𝑟𝑎𝑔𝑒 ′𝑏𝑎𝑠𝑘𝑒𝑡′ 𝑣𝑎𝑙𝑢𝑒 /𝐵𝑎𝑠𝑒 𝑏𝑎𝑠𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒) 𝑥100

Average ‘basket’ value = 𝑖𝑛𝑑𝑒𝑥 𝑛𝑢𝑚𝑏𝑒𝑟 / 100 x 𝑏𝑎𝑠𝑒 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓′ 𝑏𝑎𝑠𝑘𝑒𝑡′

23
Q

How to work out the exchange rate

A
  • To convert from a single unit currency to a double, you will multiply by the exchange rate.
  • To convert from a double unit to a single, you will divide by the exchange rate
24
Q

How to work out moving averages when conducting quantitative sales forecasting ?

A
  • Three quarter moving averages = add average of each period / 3
  • Four quarter moving average = add together average of the 4 period / 4 (then add together the two answers and divide by 2)
25
Q

Formula for cyclical variation

A

cyclical variation = actual figures- moving averages

26
Q

Formula for payback period

A

Payback = investment / net cash flow of year paid back (x12)
(if consistent)

Payback = invested amount /annual cash flow (x100)

27
Q

Formula for Average Rate of Return

A

average annual return / investment (x100)

Average annual return =net cash flow / total years

28
Q

Formula for Net Present Value

A

NPV= sum of present value - cost of initial investment)

29
Q

What are the two formulas needed when using decision trees ?

A

EMV = financial result x the probability

Net Gain = EMV – investment

30
Q

What is the formula to work out the float time in critical path analysis ?

A

Float time = LFT –Duration – EST

31
Q

Formula for current ratio?

A

Current ratio = current assets -/current liabilities

32
Q

Formula for Acid test ratio?

A

Acid rest ratio = current assets - inventory / current liabilities

33
Q

Formula for Gearing ratio?

A

Gearing ratio = non-current liabilities/capital employed (x100)
Capital employed = non-current liabilities - total equity

34
Q

Formula for Return On Capital Employed

A

ROCE= operating profit /capital employed (x100)

35
Q

Formula for Labour turnover

A

labour turnover = number of staff leaving / average number of staff (x100)

36
Q

Formula for Labour Retention

A

Labour Retention = number of employees who have worked for a period / number at the end of the period (x100)

37
Q

Formula for Absenteeism

A

Absenteeism = number of days absent in a period / total number of working days in the period

38
Q

Formula for Labour productivity

A

Labour Productivity = Output per period / number of employees

Business Studies (22 decks)

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