Unit 3 Formulas Flashcards
What is the formula for Net Cash Flow?
Total Cash Inflow - Total Cash Outflow
This formula calculates the net cash generated or consumed over a specific period.
How is the Closing Balance calculated?
Opening balance + Net Cash Flow
The closing balance is the amount of cash available at the end of a period.
What components make up Total Revenue?
Selling Price x Quantity Sold
Total revenue is the total income generated from sales before any costs are deducted.
What are the components of Total Costs?
Fixed costs + Total Variable costs
Total costs include both fixed and variable expenses incurred in production.
How is Profit calculated?
Total revenue - Total costs
Profit is the financial gain after subtracting all expenses from total revenue.
What does Contribution (per unit) refer to?
Selling Price - Variable Cost (per unit)
Contribution per unit indicates how much each unit sold contributes to fixed costs and profit.
What is the formula for Break-even Output?
Total Fixed Costs / Unit Contribution
Break-even output is the number of units that must be sold to cover total costs.
Define Margin of Safety.
Actual Sales - Break-even level of output
Margin of safety measures the difference between actual sales and break-even sales.
What is Gross Profit?
Sales Revenue - Cost of Goods Sold
Gross profit indicates the efficiency of production and pricing strategies.
How is Net Book Value calculated?
Cost - Depreciation
Net book value reflects the value of an asset after accounting for depreciation.
What are Net Current Assets?
Current Assets - Current Liabilities
Net current assets indicate the liquidity position of a business.
What does Capital Employed represent?
Non-current assets + Net current assets - Long term liabilities
Capital employed shows the total amount of capital used in the business.
What is the Gross Profit Margin formula?
Gross Profit/Revenue x 100
Gross profit margin indicates the percentage of revenue that exceeds the cost of goods sold.
What is Mark-up?
Gross Profit/Cost of Sales x 100
Mark-up measures how much more a product is sold for compared to its cost.
What is the formula for calculating Total Contribution?
Contribution per unit x Margin of Safety
Total contribution shows the overall contribution to fixed costs and profit from all units sold.
