Business Formulae and Calculations

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  • Created by: td142
  • Created on: 11-05-18 14:40
Market Capitalisation
Number of issued shares x current share price
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Net Gain (Decision Tree)
Enitial cost - initial cost of decision
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Price Elasticity of Demand (PED)
(% change in demand / % change in price) x100
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Added Value
Sales revenue - costs of boughtin goods and services
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Labour Productivity
Output per period / number of employees
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Capacity Utilisation
Actual output in a given time / maximum output in a given time
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Gross Profit
Sales revenue - cost of sales
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Return on Investment
(Return on investment / cost of investment) x100
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Operating Profit
Sales revenue - cost of sales - operating expenses
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Contribution per unit
Selling price - variable cost per unit
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Total contribution
Total revenue - total variable costs
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Breakeven
Fixed costs / contribution per unit
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Margin of safety
Actual output - breakeven level output
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Gross profit margin
(Gross profit / sales revenue) x100
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Operating profit margin
(Operating profit / sales revenue) x100
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Profit for the year margin
(Profit for the year / sales revenue) x100
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Labour turnover
(Number of staff leaving / number of staff being employed) x100
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Employee retention rate
(Number of staff who stay / avg number of staff being employed) x100
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Labour cost per unit
Labour costs / units of output
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Return on Capital Employed (ROCE)
(Operating profit / capital employed) x100
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Gearing
( nc liabilities / nc liabilities + total equity) x100
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Capital Employed
nc liabilities + total equity
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Payables (creditors) days
(payables / cost of sales) x365
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Receivables (payables) days
(receivables / sales revenue) x365
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Inventory turnover
Cost of goods sold / avg inventories held
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Average rate of return (ARR)
( avg return from project py / initial cost of project ) x100
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Other cards in this set

Card 2

Front

Net Gain (Decision Tree)

Back

Enitial cost - initial cost of decision

Card 3

Front

Price Elasticity of Demand (PED)

Back

Preview of the front of card 3

Card 4

Front

Added Value

Back

Preview of the front of card 4

Card 5

Front

Labour Productivity

Back

Preview of the front of card 5
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