Important formulae Flashcards
(16 cards)
Which part is the trading account?
Top of the profit and loss account
What does the profit and loss sheet contain?
Sales Cost of sales (including opening stock, purchases and closing stock) Gross profit Expenses Net profit
What is the Cost of Sales formula?
Profit and loss sheet
Opening Stock + Purchases -
Closing Stock
What is the formula for GP (Gross Profit) ?
Profit and loss sheet
Sales - Cost of Sales
How do you work out GP percentage?
Gross profit / sales x100
What is the Net Profit formula?
Profit and loss sheet
Gross Profit - Total Expenses
How do you work out Net Profit as a percentage?
Net Profit / sales x100
What does the Balance Sheet contain?
Fixed Assets (Premises, Fixtures and Fittings, equipment and Motor vehicles)
Current Assets (Closing Stock, Debtors, Bank, Cash)
Current Liabilities (Creditors, Bank Overdraft)
Working Capital
Total Assets
Long Term Loans
Net Assets
Opening Capital
Net Profit (appears on both)
Drawings
Closing capital (must balance with net assets)
Formulas for the balance sheet:
How are Fixed Assets, Current Assets and Current Liabilities all similar?
You just add up all figures for the corresponding subsections for each total
What is the formula for Working Capital?
Balance Sheet
Total Current Assets- Total Current Liabilities
What is the formula for Total Assets?
Balance Sheet
Fixed Assets + Current Assets - Current Liabilities
What is the formula for Net Assets?
Balance Sheet
Total Assets - Long Term Liabilities
What is the formula for Closing Capital?
Balance Sheet
Opening Capital + Net Profit - Drawings
What is the formula for contribution?
Break Even
Sales - total variable costs / Output
What is the Break Even Formula
Break Even
Fixed costs / contribution
What is the Margin of Safety formula?
Break Even
Output-breakeven / output
