THEME 3 Flashcards
average cost per unit
total production costs / total output
% growth (in units)
(output in units for year B - output in units for year A) / output in units in year A
x 100
% growth (in value)
(revenue for year B - revenue for year A) / revenue in year A
x 100
payback period (years)
number of years +
outlay outstanding / monthly cash flow in year of payback
average rate of return (%)
average annual profit / initial outlay
x 100
net present value
cash flow per year x discount factor
( remember to subtract initial outlay )
capital employed
total equity + non current liabilities
(note: total equity and long term loans)
gross profit
revenue - cost of sales
operating profit
gross profit - expenses
gearing ratio
long term liabilities / capital employed
x 100
return on capital employed (ROCE)
operating profit / capital employed
x 100
labour productivity
output per period / number of employees per period
labour turnover (%)
number of staff leaving the firm in a year / average number of staff during the year
x 100
absenteeism (%)
total days (or hours) of absence in a period / possible total days (or hours) that could have been worked
x 100
revenue
quantity sold x price per unit
price elasticity of demand
% change in quantity demanded / % change in price
income elasticity of demand
% change in quantity demanded / % change in income
% change in demand
change in demand / original demand
x 100
% change in price
change in price / original price
x 100
% change in income
change in income / original income
x 100
gross profit
revenue - cost of sales
operating profit
gross profit - other operating expenses
net profit
operating profit - interest
net assets
non current assets + current assets - current liabilities - non current liabilities
gross profit margin
gross profit / revenue
x 100
operating profit margin
operating profit / revenue
x 100
net profit margin (profit for the year)
net profit / revenue
x 100
current ratio
current assets / current liabilities
liquid capital ratio (acid test ratio)
(current assets - inventory) / current liabilities
