THEME 2+3 FORMULAS Flashcards
(30 cards)
Gross profit
sales revenue - cost of sales
Cost of sales
Opening stock + purchases - closing stock
Operating profit
gross profit - expenses
Profit for the year
Operating profit - interest and taxation and taking into account exceptional items
Gross profit Margin
Gross profit/ sales revenue x 100
Operating profit margin
Operating profit/ sales revenue x 100
Profit of the year margin
profit of the year/ sales revenue x 100
Current ratio
current assets/ current liabilities
Acid test ratio
Liquid assets/ current liabilities
Working capital
current assets - current liabilities
Capacity utilisation
actual output/ maximum output x 100
Net cash flow
cash inflows - cash outflows
Closing balance
opening balance + net cash flow
Sales volume
sales revenue/ selling price per unit
Sales revenue
Selling price x quantity sold
Total costs
Fixed costs + total variable costs
Total variable costs
total costs - fixed costs
contribution per unit
selling price - variable cost per unit
Break-even point
fixed costs/ contribution per unit
Margin of safety
actual output - break-even output
Variance analysis
budgeted figure - actual figure
Payback period
Amount remaining to recover/ Cash flow in that year
Average rate of return (ARR)
Average annual profit/ Initial investment x 100
Net present value
Net cash flow x discount factor
* Add up all the annual NPVs to calculate the total return
