Equations Flashcards
(18 cards)
Revenue
Volume x Price
variable costs
cost per unit x total number of units
total costs
variable costs + fixed costs
Gross profit
Revenue - variable costs
gross profit margins
gross profit/revenue x100
operating profit
Gross profit - fixed costs
Operating profit margins
operating profit /revenue x100
Net profit
operating profit - tax
Net profit margins
net profit/revenue x100
contribution per unit
Selling price per unit-variable costs per unit
-The difference between sales revenue and variable costs
- what is left over is used to CONTRIBUTE to paying fixed cost
Total contribution
Total revenue-total variable costs
or
Contribution per unit x number of units sold
Break even level of out put
fixed costs/
revenue - variable costs
current ratio
current assets/current liabilities
Acid test ratio
Current assets- inventory/current liabilities
Capacity utilisation
Current output
/maximum possible output x100
Margin of safety
Sales volume-breakeven point
Contribution margin
Revenue-variable costs
Break even point
Fixed cost/contribution margin
-Level of output to cover the total costs of production
-How much a business needs to sell to cover its costs
