Important Formulae Flashcards Preview

BTEC Business - Finance > Important Formulae > Flashcards

Flashcards in Important Formulae Deck (26):
1

How do you calculate sales revenue?

quantity sold x selling price

2

How do you calculate gross profit?

sales revenue - costs of goods sold

3

How do you calculate costs of good sold?

open inventories + purchases - closing inventories

4

How do you calculate straight line depreciation?

Historic value - residual value / expected life

5

How do you calculate reducing balance depreciation?

Depreciation charge per year = (historic value - residual value) x depreciation factor

Depreciation charge - current historic value

6

How do you calculate gross profit margin?

gross profit
----------------------------
sales revenue x 100

7

How do you calculate net profit margin?

net profit
-----------------------------
sales revenue x 100

8

How do you calculate mark up?

gross profit
-----------------------------------
cost of goods sold x 100

9

How do you calculate return on capital employed?

capital employed = opening balance + net profit

Return on capital employed = operating profit /
capital employed x 100

10

How do you calculate current ratio?

current assets
----------------------
current liabilties

11

How do you calculate liquid capital ratio?

current assets - stock
-------------------------------
current liabilities

12

How do you calculate net cash flow?

Inflow - Outflow

13

How do you work out variable costs?

cost of one x quantity

14

How do you work out break even?

Total fixed costs / unit contribution

15

How do you calculate margin of safety?

Actual output - breakeven output

16

How do you calculate trade receivables?

Trade receivables / credit sales x 365

17

How do you calculate trade payable?

Trade payables / credit purchases x 365

18

How do you calculate inventory turnover?

Average inventory turnover / cost of sales x 365

19

Net profit

Gross profit - total expenses

20

How do you calculate working capital (also known as net current assets)

Current assets - Current liabilties

21

How do you calculate net assets

Total assets - Total liabilities

22

Opening balance

Closing balance + net cash flow

23

Total contribution

Sales revenue - Total variable costs

24

Contribution per unit

Selling price - variable costs

25

Closing balance

Opening balance + net cash flow

26

Average inventory held

Opening inventory + Closing inventory / 2