Business Formulae and key data 0.0 / 5 ? Business StudiesFORMULAE AND KEY DATAA2/A-levelAQA Created by: annie1405Created on: 07-04-18 10:46 Total Costs Fixed costs + Variable costs 1 of 51 Profit Total revenue - Total costs OR Total contribution - Fixed costs 2 of 51 Variable costs (Total Variable costs) Variable cost per unit x number of units sold 3 of 51 Total revenue (sales revenue or turnover) Selling price per unit x number of units sold 4 of 51 Market Capitalisation Number of issued shares x current shares price 5 of 51 Net gain in a decision tree Expected value - initial cost of decision 6 of 51 Market Size / volume (definition) The quantity of goods and services produced in a particular market over a period of time (usually 1 year) 7 of 51 Market size / Value (definition) The total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time (usually 1 year) 8 of 51 Sales Volume (definition) The quantity of goods and services produced by a particular business over 1 year 9 of 51 Sales Value (definition) The total sales revenue of a particular business over 1 year. 10 of 51 Added value (value added) Sales revenue - costs of brought in goods and services 11 of 51 Gross Profit Sales revenue - cost of sales 12 of 51 Operating Profit Sales revenue - cost of sales - operating expenses 13 of 51 Profit for the Year Operating profit + profit from other activities - net finance costs -Tax 14 of 51 Variance (Definition) The difference between an actual and a budgeted figure 15 of 51 Favourable Variance (definition) Profits being higher than forecasted 16 of 51 Adverse Variance (Definition) Profits being lower then forecasted 17 of 51 Contribution per unit Selling price - Variable cost per unit 18 of 51 Total contribution Contribution per unit x units produced or sold OR Total revenue - total variable costs 19 of 51 Break even output Fixed costs 20 of 51 Break even output on a break even chart The level of output at which Total revenue equals total costs 21 of 51 Level of profit on a break even chart The vertical distance between the total revenue line and the total costs line 22 of 51 Margin of safety Actual level of output - Break even level of output 23 of 51 Gross profit margin (%) Gross profit 24 of 51 Operating profit margin (%) Operating profit 25 of 51 Profit for the year margin (%) Profit for the year 26 of 51 Labour turnover (%) Number of staff leaving during the year 27 of 51 Employee retention rate (%) Number of employees at the end of the year- number of leavers 28 of 51 Employee costs as a percentage of turnover Employee costs 29 of 51 Labour cost per unit Labour costs 30 of 51 Return on Capital employed (ROCE) (%) Operating profit 31 of 51 Capital employed Total equity + non current liabilities 32 of 51 Current ratio Current assets 33 of 51 Gearing (%) non current liabilities 34 of 51 Payables days Payables 35 of 51 Receivables days Recievables 36 of 51 Inventory turnover Cost of goods sold 37 of 51 Average rate of return (%) Net return from project (£) or number of years 38 of 51 Market Growth (%) in year 'x' Change in size of market 39 of 51 Sales growth (%) in year 'x' Change in sales of product or business 40 of 51 Market share (%) Sales of one product/brand/business 41 of 51 Price elasticity of Demand Percentage change in quantity demanded 42 of 51 Labour Productivity Output per time period 43 of 51 Unit costs (average costs) Total costs of production 44 of 51 Capacity utilisation (%) Actual output in a given time period 45 of 51 Return on investment ROI (%) Return on investment £ 46 of 51 Employee costs as a (%) of revenue employee costs 47 of 51 Net current assets current assets - current liabilities = the current working capital the business has available 48 of 51 Net assets Total assets - total liabilities 49 of 51 Pay back Amount remaining to recover 50 of 51 Average rate of return Average annual profit 51 of 51
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