A-Level Business Formulas Flashcards
(27 cards)
ARR: Formula + Four step method
Formula: annual profit/initial capital cost x 100
- Add all positive cash flows
- Subtract cost of investment
- Divide by lifespan of investment
- Divide answer to 3 by capital cost then x 100
Capacity Utilisation
Current output level/maximum output level x100
Gearing Ratio
Non-current liabilities/shareholder equity + NCL
Market share
Total sales of firm/total sales of industry x 100
Gross profit margin
Gross profit/revenue x 100
Profit margin
Profit / revenue x 100
Current ratio
Current assets / current liabilities
Acid test radio
Current assets - inventory / current liabilities
Labour productivity
Total output in time period/number employees
Capital productivity
Total output in time period/ capital employed
Labour turnover
Number of employees leaving/average number of employees
Absenteeism
Number of people absent/total number employed
Unit costs
Total costs/unit produced
Return on capital employed
Operating profit/capital employed x100
Inventory turnover
Cost of goods sold/value of inventories
Day sales receivables
Trade receivables x365 /revenue
Dividend yield
Dividends per share / current share price
Shows rate of return to shareholders at current market share price.
Dividends per share
Total annual dividend / total shares issued
Price to earnings ratio
Share price/ earnings per share
Earnings per share
Profit for the year/shares issued
Dividend cover
Profit for year after tax and interest/ Annual dividends
Contribution
Selling price - variable costs
Profit
Total revenue - total costs
Total contribution
Contribution per unit x no of units
