Business Formula Flashcards

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  • Created by: Makwena
  • Created on: 27-02-18 13:38
Total Costs
Fixed Costs + Variable Costs
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Profit
Total Revenue - Total Costs or Total Contribution - Fixed Costs
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Variable Costs (Total Variable Costs)
Variable Cost per Unit x Number of Units Sold
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Total Revenue (Sales Revenue or Turnover)
Selling Price per Unit x Number of Units Sold
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Market Capitalisation of a Business
Number of issued Shares x Current Share Price
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Expected value of a decision with two possible outcomes - A & B
[Pay-off of A x probability of A] + [Pay-off of B x probability of B]
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In a decision tree Net Gain
Expected Value - Initial Cost of decision
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Market Size (Volume)
Quantity of Goods and services produced in a market over a period of time (usually 1 year)
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Market Size (Value)
Total sales revenue generated from selling all goods and service produced in a particular market over a period of time (usually 1 year)
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Sales Volume
Quantity of goods and services produced by a particular business over a period of time (usually 1 year
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Sales Value
The total sales revenue of a particular business over a period of time (usually 1 year)
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Market Growth (%) in year 'X'
Change in size of the market between year (X-1) and year X/Size of market year (X-1)
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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
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Market Share (%)
Sales of one product OR brand OR business/Total sales in the market x 100
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Price Elasticity of Demand
Percentage change in quantity demanded/Percentage change price
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Added value
Sales revenue - Costs of bought-in goods and services
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Labor Productivity
Output per time period/Number of employees
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Unit Costs (Average Costs)
Total Costs of production/Number of units of output produced
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Capacity Utilization (%)
Actual output in a given time period/Maximum possible output in a given time period x 100
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Return on Investment (%)
Return on Investment (£)/Cost of the investment (£) x 100
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Gross Profit
Sales Revenue - Cost of Sales
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Profit from Operations = Operating Profit
Sales Revenue - Cost of sales - Operating Expenses
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Profit for Year
Operating Profit + Profit from other activities - Net finance cost - Tax
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Variance
Difference between an actual and budgeted figure. Favourable = Profits > Forecast and Adverse = Profits < Forecast
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Contribution per unit
Selling Price - Variable Cost per Unit
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Total Contribution
Contribution per unit x Units produced or sold OR Total Revenues - Total Variable Costs
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Break Even Output
Fixed Costs/Contribution per Unit
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Break Even Output
level of output at which Total Revenue - Total Costs
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Break Even Chart
Level of Profit at given level of output is the vertical distance between Total Revenue and Total Cost
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Margin of Safety
Actual level of output - Break-even level of output
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Gross Profit Margin (%)
Gross Profit/Sales Revenue x 100
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Profit from Operations Margin = Operating profit margin (%)
Operating profit/Sales Revenue x 100
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Profit for Year Margin (%)
Profit for year/Sales revenue x 100
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Labour Turnover (%)
Staff leaving leaving during the year/ Avg staff employed during the year x 100
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Employee Retention Rate (%) for a time period
No. employes at end of period - no. of leavers/No. employees at end of period x 100
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Labour cost per unit
Labour costs/Units of output
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return on capital employed (ROCE)(%)
Operating profits/total equity plus non-current liabilities (AKA CAPITAL EMPLOYED) x 100
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Current ratio
Current assets/Current liabilities
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Gearing (%)
Non-current liabilities/total equity plus non-current liabilities x 100
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Payables days
Payables (Creditors)/Cost of sales x 365
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Receivables days
Receivables (Debtors)/Sales Revenue x 365
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Inventory Turnover
Cost of goods sold/Average inventory held
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Average rate of return (%)
Net return from project (£)÷Number of years/Initial cost of project x 100
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Net return from project (£)
Total income from project over its lifetime - Total costs of project over its lifetime, including the initial cost of the project
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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 Variable Costs)

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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