Business equations/formula Flashcards
(35 cards)
Total variable costs
variable cost per unit x number of units sold
Market capitalisation
Number of shares issued x current share price
Expected value
Probability of event occurring X pay off
Net gain
Expected value - Initial cost
Market growth
(new market size - old market size) / old market size X100
Price elasticity of demand
%change in QD / %change in Price
Income elasticity of demand
%change in QD/ % change in real income
Added Value
Sales revenue - cost of bought-in goods and services
Unit cost
total costs/units output
Capacity utilisation
Output/capacity X100
ROI
profit from investment/cost of investment X100
Gross profit
Sales revenue - cost of sales
operating profit
Sales revenue- cost of sales - operating expenses
Profit for the year
Operating profit +other profit - Net finance costs- Tax
Gross profit margin
Gross profit/sales revenue X100
OPM
OP/sales revenue X100
Profit for year margin
Profit for year/sales revenue X100
Contribution per unit
selling price per unit - variable costs per unit
Total contribution
total revenue-total variable costs or (contribution per unit x num units sold)
Break even output
Fixed costs/ contribution per unit
Margin of safety
Actual output - Break even output
Labour costs per unit
Labour costs/units of output
Employee costs as a % of turnover
Employee costs /sales turnover X100
Labour turnover
number of staff leaving/average num of staff employed X100
