Formulas Flashcards
(36 cards)
What is the formula for Revenue (Sales or Turnover)?
Selling price per unit × Number of units sold
How do you calculate Total Variable Costs?
Variable cost per unit x Number of units sold
What is the formula for Total Costs?
Fixed costs + Variable costs
How is Profit calculated?
Total revenue - Total costs OR Total contribution - Fixed costs
What is the formula for Market Capitalisation of a business
Number of issued shares x Current share price
What is the formula for Expected Value of a decision with two possible outcomes?
[Pay-off of A x probability of A] + [Pay-off of B x probability of B]
How do you calculate Net Gain?
Expected value - Initial cost of decision
What is the formula for Market Growth (%)?
Change in the size of the market over a period / Original size of the market × 100
How is Market Share (%) calculated?
Sales of one product OR brand OR business / Total sales in the market × 100
What is Added Value?
Sales revenue - costs of bought-in goods and services
How do you calculate Labour Productivity?
Output over a time period / Number of employees
What is the formula for calculating average unit costs?
Average unit costs = Total costs / Number of units of output
How is capacity utilisation calculated?
Capacity utilisation (%) = (Actual output / Maximum possible output) * 100
What is the formula for return on investment (ROI)?
Return on investment (%) = (Profit from the investment (£) / Cost of the investment (£)) * 100
How is gross profit calculated?
Gross Profit = Revenue - Cost of Sales
What is the formula for profit from operations
Profit from Operations = Operating profit = Gross profit - Operating Expenses
What is the formula for calculating profit for the year?
Profit for year = Operating profit + Profit from other activities - Net finance costs - Tax
How is gross profit margin (%) calculated?
Gross profit margin (%) = (Gross profit / Revenue) * 100
What is the formula for operating profit margin (%)?
Operating profit margin (%) = (Operating profit / Revenue) * 100
How is profit for year margin (%) calculated?
Profit for year margin (%) = (Profit for year / Revenue) * 100
What is the formula for Contribution per unit?
Selling price - Variable costs per unit
How is Total contribution calculated?
Contribution per unit x Units sold OR Total revenue - Total variable costs
What is the formula for Break-even output?
Fixed costs / Contribution per unit
How is Margin of safety calculated?
Actual level of output - Break-even level of output
