% rise in average earnings/ % change in real income
2 of 49
YED
Measures the responsiveness of demand to changes in income
3 of 49
YED Calculation
% change in quantity demanded/ change in real incomes
4 of 49
PED
Measures the responsiveness of demand to changes in price.
5 of 49
PED Calculation
% change in quantity demanded/ change in price
6 of 49
Cash flow Calculation
Inflows - Outflows
7 of 49
Sales Revenue Calculation
P x Q
8 of 49
Sales Volume Calculation
Product A + Product B.....
9 of 49
Fixed Cost
A cost that doesn't change with the level of output.
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Variable Cost
A cost that changes with the level of output.
11 of 49
Total Cost Calculation
Fixed costs + variable costs
12 of 49
Average Cost Calculation
Total cost / number of units produced
13 of 49
Contribution Calculation
Selling Price - Variable cost
14 of 49
Total Contribution Calculation
Contribution per unit x units produced
15 of 49
Break Even
The point at which revenue matches the amount made to make a product, so neither a profit or a loss is made.
16 of 49
Break Even Calculation
Fixed Cost / Contribution per unit (sp-vc)
17 of 49
Margin of Safety
The point at which demand can fall before the firm starts making a loss.
18 of 49
Margin Of Safety
Break even point - total sales
19 of 49
Gross Profit
Sales revenue - Cost of goods sold
20 of 49
Gross Profit margin
Gross Profit / Sales revenue x 100
21 of 49
Operating Profit
Gross profit - Operating Expensives
22 of 49
Operating Profit Margin
Operating profit / sales revenue x 100
23 of 49
Net profit
Operating profit - taxes/insurance
24 of 49
Net Profit margin
Net profit / sales revenue x 100
25 of 49
Return On Capital Employed
Operating Profit / Total Equity + non current liabilities x 100
26 of 49
Acid test ratio
Current asserts - inventory / current liabilties
27 of 49
Current ratio
Current assets / current liabilties
28 of 49
Gearing
non current liabilities / total equity + non current liabilities x 100
29 of 49
Annual rate of return
number of years / initial cost of project x 100
30 of 49
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.
31 of 49
Labour Productivity
Output per time period / number of employees
32 of 49
Productivity
Output / time
33 of 49
Capacity Utilisation
actual level of output / maximum level of output x 100
34 of 49
Net present value
Cash flow x discount value
35 of 49
Payback Period
Initial investment / annual payback
36 of 49
Exchange Rate
The value of one currency when compared to another
37 of 49
Spiced
Strong pound, imports cheaper, exports dearer
38 of 49
wpidec
Weak pound, Imports dearer, exports cheaper
39 of 49
Balance Sheet
A snapshot of the business which looks at assets vs liabilities
40 of 49
Working Capital
A measure of how the firm can deal with everyday expenses
41 of 49
Depreciation
The value of an asset falling over time.
42 of 49
Trade Receivables
Amount owed by debtors to a business.
43 of 49
Debtor
Somebody who owes money to the business.
44 of 49
Creditor
Someone who the business owes money too.
45 of 49
Liquidity
A businesses ability to make short term cash payment on time.
46 of 49
Capital Employed
Total equity + non current liabilties
47 of 49
Time value of money
1 today is worth more that 1 in the future due to the fall in purchasing power
48 of 49
Investment appraisal
The process of analyzing the financial merit of a possible future investment.
49 of 49
Other cards in this set
Card 2
Front
% rise in average earnings/ % change in real income
Back
Real Income Calculation
Card 3
Front
Measures the responsiveness of demand to changes in income
Back
Card 4
Front
% change in quantity demanded/ change in real incomes
Back
Card 5
Front
Measures the responsiveness of demand to changes in price.
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