BUSSINESS CALCULATIONS REVISION Flashcards
(36 cards)
Revenue (Sales or Turnover)
Selling price per unit × Number of units sold
Variable costs (Total variable costs)
Variable cost per unit × Number of units sold
Total costs
Fixed costs + Variable costs
Profit
Total revenue − Total costs OR
Total contribution − Fixed costs
Market capitalisation of a business
Number of issued shares × Current share price
Expected value of a decision with two possible outcomes - Decision tress
[Pay-off of A × probability of A] + [Pay-off of B × probability of B]
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 × 100
Market share (%)
Sales of one product OR brand OR business
Total sales in the market × 100
Added value
Sales revenue − costs of bought-in goods and services
Labour productivity
Output over a time period/Number of employees
Unit costs
Total costs/Number of units of output
Capacity utilisation (%)
Actual output/Maximum possible output × 100
Return on investment (%)
Profit from the investment (£)/Cost of the investment (£) × 100
Gross Profit
Revenue − Cost of Sales
Profit from Operations
Operating profit =Gross profit − Operating Expenses
Profit for year
Operating profit + Profit from other activities − Net finance costs − Tax
Gross profit margin (%)
Gross profit/Revenue × 100
Profit from operations margin = Operating profit margin (%)
Operating profit/Revenue × 100
Profit for year margin (%)
Profit for year/Revenue × 100
Variance
Budgeted figure – actual figure
Contribution per unit
Selling price − Variable costs per unit
Total contribution
Contribution per unit × Units sold
OR
Total revenue − Total variable costs
Break-even output
Fixed costs/Contribution per unit
