*Business Equations Flashcards
(32 cards)
Market Share
Sales of a business / Total sales in market x 100
Price elasticity of demand (PED)
% Change in quality demanded/ % change in price
PED as percentage change
new value - old value / old value x 100
Income elasticity of demand (YED)
% Change in quantity demanded / %change in Income
Percentage change
New figure - old figure / old figure x 100
Total revenue
Sales price x quantity sold
Net cash flow
Inflows - outflows
Opening balance
Closing balance from previous month
Closing balance
Opening balance + net cash flow
Contribution
Sales price - VC per unit
Break even output
FC / contribution per unit
Total contribution
Contribution per unit x quantity
Profit (3ways)
Total revenue - total costs
Total contribution - total fixed costs
Margin of safety x contribution per unit
Variance
Actual figures - budgeted figures
Profit margin
Profit/Revenue x 100
Gross profit
Revenue - cost of sales
Operating profit
Gross profit - operating expenses
Net profit
Operating profit - net interest
Current ratio
Current assets / current liabilities :1
Acid test ratio
Current assets - Inventory / Current liabilities :1
Productivity
Total output in time period / number of inputs
Capacity utilisation
Actual output / max possible output x 100
Gearing
Non current liabilities / capital employed x 100
- Above 50% high (more than half long term funding borrowed)
- Below 50% low gearing
Capital employed
Total assets - total liabilities
