Business Flashcards
(21 cards)
Added value
Price product is sold for - cost of making the product
Price elasticity of demand
% change in quantity demanded / % change in price
Income elasticity
% change in quantity demanded / % change in income
Price
Unit cost + (unit cost / 100 x mark up)
Sales revenue
Selling price x selling volume
Total variable costs
Average variable cost (AVC) x quantity produced
Total cost
fixed costs + variable costs
Profit
Total revenue - total costs
Contribution per unit
Selling price - variable cost per unit
Break-even point
total fixed costs / contribution per unit
Margin of safety
Actual output - break-even point
Percentage change in profit
(Current years profit - previous years profit) / previous years profit x 100
Gross profit
total revenue - cost of sales
Operating profit
Gross profit - other operating expenses
Net profit
Operating profit - interest
Gross profit margin (%)
Gross profit / revenue x 100
Operating profit margin (%)
Operating profit / revenue x 100
Net profit margin (%)
Net profit / revenue x 100
Current ratio
current assets / current liabilities
Acid test ratio
(current assets - inventory) / current liabilities
Capacity utilisation (%)
current output / max possible output. x100
