Analysis Formulas Flashcards
(21 cards)
Sales
revenue a firm obtains from selling a product
S monetary
Q X Pselling
wholesales vs. retail sales
wholesales are referred to the first 2 levels of distributors
retail sales refers to the price sold at the store
Market share
share in unit
MSunits = Sunits/ Munits
share in monetary value
MS monetary = Smonetary/ M monetary
Profit Margin
gross profit margin per unit
GM=Pselling - COGS (cost of goods sold)
gross margin ratio on cos t
GM(cost)= (Pselling - COGS)/ COGS
gross margin ratio on selling price
GMprice = (Pselling - COGS)/ P selling
net contribution margin
Pselling - (COGS + Pselling)/ whatever variable the question asks (cost/ selling price)
when p decreases by a certain percentage, contribution margin drops by a mich ( ) percentage
higher
net profit margin
P retail selling price - COGS - selling cost
net margin ratio on cost
net profit margin/ (COGS + selling cost)
net margin ratio on selling price
net profit margin / retail price
Breakeven Volume in units
BEVunits = fixed cost/ net profit margin per unit = FC/NM
Breakeven volume in monetary sales
BEVmon. sales = BEVunits x Pselling
breakeven volume in market share (units)
BEVunit market share = BEVunits / M market units
breakeven volume in market share (sales)
BEVunit market share = BEV mon. sales / M (market monetary )
Discounting Net Present Volume
NPV = cash flow x (1/ [1+r]^t)
one year from now; 2 years from now etc…
NPV are discounted individually with different income/ revenue
process of solving NPV problems
write down discounting equation –> discounting individual years –> sum years - present value given in the problem
tricks
combine equation + work backwards
