Theme 2 formulas Flashcards
Gross Profit
Sales Revenue - Cost of Sales
Operating Profit
Gross Profit - Operating Expenses
Net Profit
Operating Profit - Interest and Exceptional Items
What are the 3 profitability formulas?
- Gross Profit Margin
- Operating Profit Margin
- ROCE
Gross Profit Margin
Gross Profit divided by Revenue
x100
Operating Profit Margin
Operating Profit divided by Revenue
x100
Return On Capital Employed (ROCE)
Operating Profit divided by Capital Employed
x100
(Total) Sales Revenue
Price x Quantity
Fixed Costs
Total Costs - Variable Costs
Total Costs
Fixed Costs + Variable Costs
(Total) Variable Costs
Variable Costs x Quantity/Output
Profit (1)
Total Revenue - Total Costs
Profit (2)
Total Contribution - Fixed Costs
Contribution Per Unit (CPU)
Selling Price - Variable Costs Per Unit (AVC)
Total Contribution
Contribution Per Unit x Quantity
