Business Finance Calculations Flashcards
(29 cards)
Total contribution
Total contribution = sales revenue - total variable cost
Contribution(per unit)
Contribution(per unit) = selling price - variable cost per unit
Profit(using contribution)
Profit(using contribution = Contribution per unit x margin of safety
Break even point
Break even point = fixed costs/(selling price - variable costs)
Break even output
Break even output = fixed costs/contribution per unit
Margin of safety
Margin of safety = Actual output - break even output
Mark up
Mark up = gross profit/cost of sales x 100
Gross profit margin
Gross profit margin = gross profit/revenue x 100
Net(or operating) profit margin
Net profit margin = net profit/sales revenue x100
Return on capital employed
Return on capital employed = net profit/capital employed x100
Net current assets
Net current assets = current assets - current liabilities
Net assets
Net assets = (non current assets + total current assets) - (total current liabilities + non current liabilities)
Capital employed
Capital employed = total equity + non-current liabilities
Balance sheets
Balance sheets = net assets = capital employed
Gross profit
Gross profit = sales revenue - cost of goods sold
Cost of goods sold
Cost of goods sold = opening inventory + purchases - closing inventory
Profit/loss for the year
Profit/loss for the year = gross profit - expenses + other incomes
Net book value
Net book value = cost - depreciation
Net(or operating) profit
Net(or operating) profit = gross profit - expenses
Current ratio
Current ratio = current assets/current liabilities
Liquid capital ratio
Current assets - inventory/ current liability
Inventory turnover
Inventory turnover = average inventory/cost of sales x365
