Business Equations and Definitions

from the AQA formula sheet with a few extra ive found that I needed

  • Created by: hollylong
  • Created on: 17-05-18 14:36
Total costs
Fixed costs + Variable costs
1 of 36
Profit
Total revenue - Total costs OR Total contribution - Fixed costs
2 of 36
Variable costs (total VC)
Variable cost per unit × Number of units sold
3 of 36
Total revenue (Sales revenue or Turnover)
Selling price per unit × Number of units sold
4 of 36
Market capitalisation of a business
Number of issued shares × Current share price
5 of 36
Expected value of a decision with two possible outcomes
(Pay-off of A × probability of A) + (Pay-off of B × probability of B)
6 of 36
In a decision tree Net gain
Expected value - Initial cost of decision
7 of 36
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)) x100
8 of 36
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)) x100
9 of 36
Market share (%)
(Sales of one product OR brand OR business / Total sales in the market) x100
10 of 36
Price elasticity of demand
Change in quantity demanded / change in price
11 of 36
Income elasticity of demand
Change in quantity demanded / change in income
12 of 36
Added value
Sales revenue-costs of bought-in goods and services
13 of 36
Labour productivity
Output per time period / Number of employees
14 of 36
Unit costs
Total costs of production / Number of units of output produced
15 of 36
Capacity utilisation %
Actual output in a given time period / Maximum possible output in a given time period x100
16 of 36
Return on investment %
(Return on investment (£) / Cost of the investment (£)) x100
17 of 36
Gross Profit
Sales Revenue - Cost of Sales
18 of 36
Operating profit
Sales Revenue - Cost of Sales - Operating Expenses
19 of 36
Profit for year
Operating profit + Profit from other activities - Net finance costs - Tax
20 of 36
Contribution per unit
Selling price - Variable costs per unit
21 of 36
Total contribution
Contribution per unit × Units produced or sold OR Total revenue - Total variable costs
22 of 36
Break-even output
Fixed costs / Contribution per unit
23 of 36
Margin of safety
Actual level of output - Breakeven level of output
24 of 36
Gross profit margin %
(Gross Profit / Sales Revenue) x100
25 of 36
Operating profit margin %
(Operating Profit / Sales Revenue) x100
26 of 36
Profit for year margin %
(Profit for the Year / Sales Revenue) x100
27 of 36
Labour turnover %
(Number of staff leaving during the year /Average number of staff employed by the business during the year) x100
28 of 36
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) x100
29 of 36
Employee costs as percentage of turnover
(Employee costs / Sales turnover) x100
30 of 36
Labour cost per unit
Labour costs / Units of output
31 of 36
capital employed
total equity + non-current liabilities
32 of 36
Return on capital employed (ROCE %)
(operating profit / capital employed) x100
33 of 36
Current ratio
Current assets / Current liabilities
34 of 36
Gearing %
(Non-current liabilities / capital employed) x100
35 of 36
Payables days
(Payables / cost of sales) x365
36 of 36

Other cards in this set

Card 2

Front

Profit

Back

Total revenue - Total costs OR Total contribution - Fixed costs

Card 3

Front

Variable costs (total VC)

Back

Preview of the front of card 3

Card 4

Front

Total revenue (Sales revenue or Turnover)

Back

Preview of the front of card 4

Card 5

Front

Market capitalisation of a business

Back

Preview of the front of card 5
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