A-Level Business Formula and Key Data

Total costs
Fixed costs + Variable costs
1 of 44
Profit
Total revenue - Total costs OR Total contribution - Fixed costs
2 of 44
Variable costs (Total variable costs)
Variable cost per unit × Number of units sold
3 of 44
Total revenue (Sales revenue or Turnover)
Selling price per unit × Number of units sold
4 of 44
Market capitalisation of a business
Number of issued shares × Current share price
5 of 44
Expected value of a decision with two possible outcomes - A&B
(Pay-off of A × probability of A) + (Pay-off of B × probability of B) N.B. Probability of A + Probability of B = 1.0
6 of 44
In a decision tree Net gain
Expected value - Initial cost of decision
7 of 44
Market size (volume)
The quantity of goods and services produced in a particular market over a period of time (usually one year)
8 of 44
Market size (value)
The total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time (usually one year)
9 of 44
Sales volume
The quantity of goods and services produced by a particular business over a period of time (usually one year).
10 of 44
Sales value
The total sales revenue of a particular business over a period of time (usually one year)
11 of 44
Market growth % in year 'X'
Change in the size of the market between year (X-1) and year X / Size of the market in year (X-1) X 100
12 of 44
Sales growth % in year 'X'
Change in sales of product or business between year (X-1) and year X / Sales of product or business in year (X-1) X 100
13 of 44
Market share %
Sales of one product OR brand OR business / Total sales in the market X 100
14 of 44
Price elasticity of demand
Percentage change in quantity demand / Percentage change price
15 of 44
Added value (value added)
Sales revenue-costs of bought-in goods and services
16 of 44
Labour productivity
Output per time period / Number of employees
17 of 44
Unit costs (average costs)
Total costs of production / Number of units of output produced
18 of 44
Capacity utilisation (%)
Actual output in a given time period / Maximum possible output in a given time period X 100
19 of 44
Return on investment (%)
Return on investment (£) / Cost of the investment (£) X 100
20 of 44
Gross Profit
Sales Revenue - Cost of Sales
21 of 44
Operating profit (Profit from Operations)
Sales Revenue - Cost of Sales - Operating Expenses
22 of 44
Profit for year
Operating profit + Profit from other activities - Net finance costs -Tax
23 of 44
Variance
The difference between an actual and a budgeted figure. Favourable variance results in profits being higher than forecast. Adverse variance results in profits being lower than forecast
24 of 44
Contribution per unit
Selling price - Variable costs per unit
25 of 44
Total contribution
Contribution per unit × Units produced or sold OR Total revenue - Total variable costs
26 of 44
Break-even output
Fixed costs / Contribution per unit
27 of 44
On a break-even chart the break-even output is...
The level of output at which Total Revenue equals Total Costs
28 of 44
On a break-even chart the level of profit at a given level of output is...
The vertical distance between the Total Revenue line and the Total Cost line
29 of 44
Margin of safety
Actual level of output - Breakeven level of output
30 of 44
Gross profit margin (%)
Gross profit / Sales revenue X 100
31 of 44
Operating profit margin (%) (Profit from operations margin)
Operating profit / Sales revenue X 100
32 of 44
Profit for year margin (%)
Profit for year / Sales revenue X 100
33 of 44
Labour turnover (%)
Number of staff leaving during the year / Average number of staff employed by the business during the year X 100
34 of 44
Employee retention rate (%) for a particular time period
Number of employees at end of period-number of leavers / Number of employees at end of period X 100
35 of 44
Employee costs as percentage of turnover
Employee costs / Sales turnover X 100
36 of 44
Labour cost per unit
Labour costs / Units of output
37 of 44
Return on capital employed (ROCE) (%)
Operating profit / Total Equity + non-current liabilities X 100 (Where total equity + non-current liabilities = capital employed)
38 of 44
Current ratio
Current assets / Current liabilities
39 of 44
Gearing (%)
Non-current liabilities / Total equity + non-current liabilities X 100 (Where total equity plus non-current liabilities = capital employed)
40 of 44
Payables days
Payables / Cost of sales X 365 (Where payables = creditors)
41 of 44
Receivables days
Receivables / Sales revenue X 365 (Where receivables = debtors)
42 of 44
Inventory turnover
Cost of goods sold / Average inventories held
43 of 44
Average rate of return (%)
Net return from project (£) or number of years / Initial cost of project (£) X 100
44 of 44

Other cards in this set

Card 2

Front

Total revenue - Total costs OR Total contribution - Fixed costs

Back

Profit

Card 3

Front

Variable cost per unit × Number of units sold

Back

Preview of the back of card 3

Card 4

Front

Selling price per unit × Number of units sold

Back

Preview of the back of card 4

Card 5

Front

Number of issued shares × Current share price

Back

Preview of the back of card 5
View more cards

Comments

BethClarkson

Report

Great Thank!

Similar Business Studies resources:

See all Business Studies resources »See all All Topics resources »