equations Flashcards
(21 cards)
What is the formula for Market Share?
(Total Sales of the business / Total sales in the market) x 100
Market share indicates the percentage of an industry’s sales that a particular company controls.
How is Price Elasticity of Demand (PED) calculated?
% change in Quantity Demanded / % change in Price
PED measures how much the quantity demanded of a good responds to a change in price.
What does Income Elasticity of Demand (YED) represent?
% change in Quantity Demanded / % change in Income
YED indicates how the quantity demanded changes in response to changes in consumer income.
What is the formula for calculating Revenue?
Price x Quantity
Revenue refers to the total income generated from sales before any costs are deducted.
How do you calculate Total Costs?
Fixed Costs + Variable Costs
Total costs encompass all expenses incurred in the production of goods or services.
What is the Contribution in a business context?
Selling Price - Variable Cost
Contribution measures how much revenue is available to cover fixed costs and generate profit.
Define Gross Profit.
Sales Revenue - Cost of Sales
Gross profit indicates the profitability of a company’s core activities excluding other expenses.
How is Gross Profit Margin calculated?
(Gross Profit / Sales Revenue) x 100
Gross profit margin shows the percentage of revenue that exceeds the cost of goods sold.
What is Net Profit?
Sales Revenue - Total Costs
Net profit reflects the actual profit after all expenses have been deducted from revenue.
How do you calculate Net Profit Margin?
(Net Profit / Sales Revenue) x 100
Net profit margin indicates what percentage of revenue is profit after all expenses.
What is the formula for Market Growth?
((New Market Size - Old Market Size) / Old Market Size) x 100
Market growth measures the increase in market size over a specific period.
What is Market Size?
Quantity of goods or services produced in market / Period of time.
Market size is an important metric for understanding the scale of an industry or market.
How is Total Added Value calculated?
Sales Revenue - Cost of bought in goods or services.
Total added value represents the net contribution of a business to the economy.
What is the formula for Average Unit Costs?
Total Costs / Output.
Average unit costs help businesses determine pricing strategies and profit margins.
How do you calculate Average Rate of Return?
(Average Profit / Total Investment) x 100.
Average rate of return is a crucial indicator for evaluating the profitability of an investment.
What is the formula for Percentage Change?
(Change / Original) x 100
How do you calculate Break-Even Point in Units?
Fixed Costs / (Sales Price - Variable Cost)
What is the formula for Break-Even Point in Costs/Revenue?
Break-Even Point in Units x Sales Price
How is Net Cash Flow calculated?
Cash Inflows - Cash Outflows
What is the formula for Closing Balance?
Opening Balance + Net Cash Flow
