Calculations Flashcards
(26 cards)
What is the formula for net cash flow?
Net cash flow = Cash inflows – Cash outflows
It represents the difference between cash received and cash spent during a specific period.
How is the closing balance calculated?
Closing balance = Opening balance + Net cash flow
This is the opening balance for the next period.
What is the formula for sales revenue?
Sales revenue = Selling price × Sales volume
Sales volume refers to the quantity of output.
How do you calculate total variable costs?
Total variable costs = Variable cost per unit × Sales volume
Sales volume refers to the quantity of output.
What is the formula for total costs?
Total costs = Fixed costs + Total variable costs
How is contribution per unit calculated?
Contribution per unit = Selling price – Variable costs
What does total contribution represent?
Total contribution = Sales revenue – Total variable costs
What is the formula for break-even output?
Break-even output = Fixed costs divided by contribution per unit
How is the margin of safety defined?
Margin of safety = Actual output – Break-even output
What is the formula for gross profit margin?
Gross profit margin = (Gross profit divided by revenue) × 100
How is operating profit margin calculated?
Operating profit margin = (Operating profit divided by revenue) × 100
What does the profit for the year (net profit) margin measure?
Profit for the year (net profit) margin = (Profit for the year divided by revenue) × 100
What is ROCE and how is it calculated?
ROCE = (Operating profit divided by capital employed) × 100
Define gearing.
Gearing = (Non-current liabilities divided by capital employed) × 100
How is capital employed calculated?
Capital employed = Non-current liabilities + Total equity
What is the formula for the current ratio?
Current ratio = Current assets divided by current liabilities
How is the acid test ratio defined?
Acid test ratio = Liquid assets (current assets – inventory) divided by current liabilities
What does working capital represent?
Working capital = Current assets – Current liabilities
How do you calculate net assets?
Net assets = Total assets – Total liabilities
What is the formula for Revenue (Sales Revenue)?
Selling Price per Unit × Quantity Sold
How do you calculate Cost of Sales (Cost of Goods Sold)?
Opening Stock + Purchases – Closing Stock
What is the formula for Gross Profit?
Revenue – Cost of Sales
How is Operating Profit calculated?
Gross Profit – Operating Expenses/Overheads
What is the formula for Profit for the Year (Net Profit)?
Operating Profit – (Interest + Tax)
