A2 business studies formulas

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Formulas for payback
cash in- cash out= NCF cumulative cash flow the sum of net cash flows
1 of 16
to find how many months for payback
remaining cash left reqiued for payback x 12 divide by net cash flow in year of payback
2 of 16
to find ARR step 1
work out average annual profit= total net cash flow divide by total number of years
3 of 16
to find ARR step 2
work out average annual return= average annual profit x 100 divide by initial investment
4 of 16
to find NPV step 1
multiply each years cash flow by the relevant discount factor to calculate each years discounted cash flow
5 of 16
to find NPV step 2
add up all discounted cash flows to calculate the NPV of the project
6 of 16
return on capital employed
operating or net profit divide by capital employed x 100
7 of 16
gross profit margin
gross profit divide by revenue x 100
8 of 16
operating profit margin
operating profit divided by revenue x 100
9 of 16
current ratio
current assets divide by current liabilities
10 of 16
acid test ratio
current assets- inventories divide by current liabilities
11 of 16
gearing ratio
non current liabilities divided by capital employed x 100 (%)
12 of 16
gearing ratio 2
non current liabilities divided by (non current liabilities + total equity x 100)
13 of 16
labour turn over
number of leavers divided by average number of employees x 100
14 of 16
labour productivity
output per head divided by number of employees
15 of 16
absenteeism
average number of staff absent on that day divided by total number of staff x 100
16 of 16

Other cards in this set

Card 2

Front

to find how many months for payback

Back

remaining cash left reqiued for payback x 12 divide by net cash flow in year of payback

Card 3

Front

to find ARR step 1

Back

Preview of the front of card 3

Card 4

Front

to find ARR step 2

Back

Preview of the front of card 4

Card 5

Front

to find NPV step 1

Back

Preview of the front of card 5
View more cards

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