Business Formulas

Product elasticity of demand  = % Change in quantity demanded

(PED)                             % Change in price 

Total revanue = Price x Quantity 

Income elasticity of Demand = % Change in quantity demanded

        (YED)                              % Change in income                 

Sales Volume = Sales Revanue

                              Unit Price 

Sales Revanue = Selling Price x Sales Volume 

Contribution = Selling Price - Variable costs per unit

Total Contribution = Sales revanue - Total variable cost 

Break Even Point = Fixed Costs

                                 Contribution    

Profit = (Total sales - Breakeven sales level) x Contribution

Gross Profit = Turnover - Variable costs 

Operating proft = Turnover - ( Fixed / Variable costs )

Profit for the year = Turnover - ( Fixed / variable ) - ( tax / interest )

 Profit Margin  = Profit                 x 100 (Experessed as a %)

                            Turnover

Current Ratio = Current Assests     

                           Current Liabilities

Acid Test Ratio = Current Assets - Stock

                                Current Liabilities 

 Working Capital = Current Assets - Current Liabilities 

Capacity utilisation = Current Output                        x100

                                     Maxium possiable output