Theme 2 equations Flashcards
net cash flow
total inflows - total outflows
closing balance
net cash flow + opening balance
Sales volume
Sales revenue / selling price per unit
sales revenue
price x quantity
Total costs
Fixed costs (FC) + variable costs (VC)
Fixed costs
Total costs (TC) – variable costs (VC)
Variable costs
Total costs (TC) – fixed costs (FC)
contribution per unit
price per unit - variable cost per unit
contribution
sales revenue - variable cost
break even point
fixed costs / contribution per unit
margin of safety
current output - break even output
variance analysis
actual level - budgeted level
gross profit
revenue - cost of sales
Cost of sales
Opening stock + purchases – closing stock
operating profit
gross profit - other operating expenses
profit for the year (net profit)
operating profit - (tax + interest)
gross profit margin
(gross profit /turnover) x 100
operating profit margin
(operating profit/turnover) x 100
profit for the year margin
(profit for the year/turnover) x 100
Current ratio
Current assets / current liabilities
Acid test ratio
Liquid assets / current liabilities
or
(current assets - inventory) / current libilities
Liquid assets
Current assets – inventory
working capital
current assets - current liabilities
capacity utilisation (%)
(actual output/ max possible output) x 100
