Business ratio formulas Flashcards
(36 cards)
Revenue?
Selling price per unit x units sold
Variable costs?
Variable cost per unit x units sold
Total costs?
fixed costs + variable costs
Profit?
Total revenue - total costs
Market capitalisation of a business?
Number of issued shares x current share price
Net gain?
Expected value - initial cost of decision
Market growth?
(Change in the size of the market over a period / original size of the market) x 100
Market share?
(sales of one product, brand or business / total sales in the market) x 100
Added value?
Sales revenue - costs of bought in goods and services
Labour productivity?
Output / number of employees
Unit costs?
Total costs / number of units of output
Capacity utilisation?
(Actual output / maximum possible output) x 100
Return on investment?
(Profit from the investment / cost of the investment) x 100
Gross profit?
Revenue - cost of sales
Operating profit?
Gross profit - operating expenses
Profit for the year?
Operating profit + profit from other activities - Net finance costs - tax
Gross profit margin?
(Gross profit / revenue) x 100
Operating profit margin?
(Operating profit / revenue) x 100
Profit for year margin?
(Profit for year / revenue) x 100
Variance?
Budgeted figure - actual figure
Expected value of a decision with two possible outcomes?
(Pay off of A x probability of A) + (Pay off of B x probability of B)
Contribution per unit?
Selling price - variable costs per unit
Total contribution?
Contribution per unit x units sold
Break-even output?
Fixed costs / contribution per unit
