Formulas Flashcards
Revenue (sales or turnover)
Selling price per unit x number of units sold
Variable costs (Total variable costs)
Variable cost per unit x number of units sold
Total costs
Fixed costs + variable costs
Profit
Total revenue - total costs
OR
Total contribution - fixed costs
Market capitalisation of a business
Number of issued shares x current share price
Expected value of a decision with 2 possible outcomes e.g. A & B
[Pay-off of A x probability of A] + [Pay-off of B x probability of B]
Net gain
Expected value - initial cost of decision
Market growth (%)
(Change in size of market over a period ÷ original size of market) x 100
Market share (%)
(Sales of one product OR brand OR business ÷ total sales in the market) x 100
Added value
Sales revenue - costs of brought-in goods and services
Labour productivity
Output over a time period ÷ number of employees
Unit costs (average costs)
Total costs ÷ number of units of output
Capacity utilisation (%)
(Actual output ÷ maximum possible output) x 100
Capacity utilisation (%)
(Actual output ÷ maximum possible output) x 100
Return on investment (%)
(Profit from the investment (£) ÷ cost of the investment (£)) x 100
Gross profit
Revenue - cost of sales
Profit from operations/operating profit
Gross profit - operating expenses
Profit for year
Operating profit + profit from other activities - net finance costs - tax
Gross profit margin (%)
(Gross profit ÷ revenue) x 100
Profit from operations margin / operating profit margin (%)
(Operating profit/revenue) x 100
Profit for year margin (%)
(Profit for year/revenue) x 100
Variance
Budgeted figure - actual figure
Contribution per unit
Selling price - variable costs per unit
Total contribution
Contribution per unit x units sold
OR
Total revenue - total variable costs
