Calculations Flashcards
(14 cards)
Revenue
Selling price per unit x quantity sold
Total Costs
Total fixed costs + total variable costs
Profit
Total sales- total costs
Gross Profit
Total revenue - cost of sales
Net profit
Total revenue - cost of sales - other expenses
Net profit margin
Net profit/ sales revenue x 100
Average rate of return
Average profit from the investment/ cost of investment x 100
Breakdown of the ARR (average rate of return) method
- Add up all the income
- Subtract the initial cost of the investment
- This gives you the overall profit
- Divide the profit by the number of years to get the average annual profit
- Use the formula: Annual average profit/ cost of investment x 100
Break even point in units
Fixed costs/ (sales price per unit - variable cost per unit)
Total inflows
Investment + sales
Total outflows
Raw materials + wages/salaries + marketing + set up costs
Net cash flow
Total inflows - total outflows
Opening balance
Previous months closing balance carried over
Closing balance
Opening balance + net cash flow
