Formulas Flashcards
(22 cards)
Market Capitalisation
number of shares in issue x share price
the total market value of the issued share capital of the company
Decisions Trees - Expected Value
(probability x pay off (value 1)) + (probability x pay off (value 2))
Decision Trees - Net gain
Expected Value - Cost of investment
Market Size
Value of sales = number of units sold x price per unit
Market Growth
(change in market size / original market size) x 100
the increase of size in a market in a certain time period
Market Share
(sales of product / total market sales) x 100
the percentage of market you own
PED
% change in quantity demanded / % change in price
measures the extent to which the quantity of a product demanded is affected by a change in price
YED
% change in quantity demanded / % change in income
measures the extent to which a change in quantity demanded is affected by a change in income
Operating Profit Margin
OPM = (Operating Costs / Revenue) x 100
Gross Profit Margin
(Gross Profit / Revenue) x 100
Breakeven
Fixed Costs / Selling Price - Variable Costs
Bottom part of the formula is known as Contribution (how much each product sold contributes towards the overheads)
Total Contribution
TC = Total sales - Total Variable Costs
Labour Productivity
Total output per period / number of employees per period
measures output per worker
compare result with last result to see how much productivity has changed
Average Unit Cost
total cost / units of output
the average cost of producing a single unit
Capacity Utilisation
(actual output / maximum output) x 100
Labour Turnover
(number of employees leaving over a given time period / average number employed over a given time period) x 100
Retention Rates
(number of employees with 1 or more years of service / overall workforce number) x 100
Absenteeism
(number of staff absent / total number of staff) x 10
Net cash flow
NCF = cash inflows - cash outflows
Gross Profit
GP = revenue - cost of sales
Operating Profit
OP = gross profit - fixed costs
Net Profit
NP = operating profit - interest - tax
