Theme 2 formulas Flashcards by James Leach

Q

sales revenue

A

selling price x quantity sold

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Q

total costs

A

variable + fixed

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Q

average costs

A

total costs / output

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Q

profit

A

sales revenue - total costs

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Q

unit contribution

A

selling price - variable costs

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Q

total contribution

A

contribution per unit x quantity sold

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Q

break even

A

fixed costs / contribution

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Q

gross profit

A

revenue - cost of sales

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Q

operating profit

A

gross profit - operating costs

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Q

net profit

A

operating profit - interest

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Q

gross profit margin

A

(gross profit / revenue) x100

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Q

operating profit margin

A

(operating profit / revenue) x100

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Q

net profit margin

A

(net profit / revenue) x100

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Q

current ratio

A

current assets / current liabilities

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Q

acid test ratio

A

(current assets - inventory) / current liabilities

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Q

working capital

A

current assets - current liabilities

Q

capacity utilisation

A

(current output / max output) x100

Q

productivity

A

output / input per worker

Q

total variable cost

A

average variable cost x quantity sold

Q

sales volume

A

sales revenue / selling price

Q

margin of safety

A

actual sales - break even

Q

break even

A

fixed costs / contribution

Q

A

Q

net cash flow

A

inflows - outflows

Q

opening balance

A

closing balance of last month

Q

closing balance

A

opening + net cash flow

Q

A

Q

optimal liquidity ratio for acid test

A

1.5 - 1 : 1

Q

optimal liquidity ratio for current test

A

2 - 1.5 : 1