Equations and Formulas Flashcards
(24 cards)
Total Costs
Fixed Costs + Variable Costs
Profit
Total Revenue - Total Costs
Total Variable costs
Variable cost per unit x number of units sold
Sales Revenue
Selling price per unit x number if units sold
Market Capitalisation
Number of issues shared x current share price
Market Share
Sales of one product/brand/business / Total sales in the market x 100
Price elasticity of demand (PED)
% change in quantity demand / % change in price x 100
Added Value
Sales revenue - Cost of bought in goods and services
Gross profit
Sales revenue - cost of sales
Operating profit
Sales revenue - cost of sales - operating expenses
Profit for Year
operating profit + profit from other activities - net finance costs - tax
Variance is the…
Difference between an actual and a budgeted figure
Favourable variance is when…
Actual sales or profits are higher than budget, or costs are lower than budget
Adverse variance is when…
Actual sales or profits are lower than budget, or costs are higher than budget
total contribution
Total revenue - total variable costs
OR contribution per unit x units produced/sold
Contribution per unit
selling price - variable costs per unit
Break-even output
Fixed costs(£) / contribution per unit (£)
Margin of safety
Actual level of output - break even level of output
Gross profit margin
Gross profit / sales rev x 100
Profit for year margin
ProfitForYear / sales revenue x 100
Operating profit margin
Operating profit / sales rev x 100
Return on capital employed
Operating profit / total equity + non-current liabilities x 100
Current ratio
Current assets / current liabilities :1
Gearing
Non-current liabilities / total equity + non-current liabilities x 100
