Total Costs =
Fixed costs + variable costs
1 of 58
Profit =
Total revenue - total costs OR total contribution - Fixed costs
2 of 58
(total) Variable costs =
variable cost per unit x number of units sold
3 of 58
Total Revenue (sales turnover) =
Selling price per unit x number of units sold
4 of 58
Market capitalization of a business =
Number of shares issued x current share price
5 of 58
Expected value (decision tree) =
(Pay off of A x profitability of A) + (pay off of B x profitability of B)
6 of 58
Net gain (decision tree) =
Expected Value - Initial cost of decision
7 of 58
Market Size (volume) =
the quantity of goods/services produced in a particular market over a period of time (usually a year)
8 of 58
Market Size (value) =
Total sale revenue generated from selling all of the good/services produced in a particular market over a period of time
9 of 58
Sales volume =
quantity of goods/services produced by a particular business of a period of time
10 of 58
Sales value =
Total sales revenue of a particular business over a period of time
11 of 58
Market Growth (%) in year x =
(change in size of market between year (x-1) and year x/Size of market in year (x-1)) x 100
12 of 58
Sales growth (%) in year x =
(change in sales of product or business between year x-1 and year x/Sales of product in year x-1) x 100
13 of 58
market Share (%) =
(sales of one product or brand or business/total sales in market) x 100
14 of 58
Price elasticity of demand =
% change in quantity demanded/ % change in price
15 of 58
Price inelastic demand
coefficient in the range 0 to -1
16 of 58
Price elastic demand
coefficient in the range -1 to - infinity
17 of 58
Price of finished product - cost of inputs to make it
18 of 58
Labour productivity =
Output per time period/number of employees
19 of 58
Unit costs (average costs) =
Total cost of production/number of units of output produced
20 of 58
Capacity Utilization (%) =
(actual output in time period/Max possible output in time period) x 100
21 of 58
Return on investment (%) =
(return on investment £/ Cost of investment £) x 100
22 of 58
Gross profit =
Sales revenue - cost of sales
23 of 58
Operating profit =
Sales revenue - cost of sales - operating expenses
24 of 58
profit for the year =
Operating profit + Profit from other activities - Net finance cost - tax
25 of 58
Variance
The difference between actual and budgeted figure
26 of 58
Favorable variance
Profit being higher than forecast (actual higher than budgeted)
27 of 58
profits being lower than forecast (actual figures worse than the budgeted figure)
28 of 58
Contribution per unit =
Selling price - variable cost per unit
29 of 58
Total contribution =
Contribution per unit x units produced or sold
30 of 58
OR total contribution =
Total revenue - total variable cost
31 of 58
Breakeven output =
fixed costs / contribution per unit
32 of 58
Breakeven chart
break even output is the level of output at which total revenue = total costs
33 of 58
Margin of safety =
Actual level of output - breakeven level of output
34 of 58
Gross profit margin (%) =
(Gross profit/sales revenue) x 100
35 of 58
Operating profit margin (%) =
(Operating profit/sales revenue) x 100
36 of 58
Profit for the year margin (%) =
(Profit for the year/sales revenue) x 100
37 of 58
Labour turnover (%) =
(Num. of staff leaving during year/Average num. of staff employed during the year) x 100
38 of 58
Employee Retention Rate (%) =
(num. of employees at end of time period - number of leavers)/number of employees at end of period) x 100
39 of 58
Employee cost as a percentage of turnover =
(employee costs/sales turnover) x 100
40 of 58
Labour cost per unit =
Labour costs / units of output
41 of 58
Return on capital Employed (ROCE) (%) =
(operating profit/capital employed) x 100
42 of 58
Capital employed =
Total equity + Non-current liabilities
43 of 58
Current ratio =
Current assets / current liabilities
44 of 58
Gearing (%) =
(non-current liabilities/capital employed) x 100
45 of 58
Payables Days =
(Payables/ cost of sales) x 365
46 of 58
payables =
creditors
47 of 58
recievables days =
48 of 58
recievables =
debtors
49 of 58
Inventory turnover =
Cost of goods sold / average inventories sold
50 of 58
Average rate of return (%) =
(Net return from project £or number of years/initial cost of project (£)) x 100
51 of 58
Re-order level =
Buffer stock + (lead time x daily sales)
52 of 58
Income elasticity of demand =
% change in quantity demanded/ % change in income
53 of 58
Luxury good
income elasticity = MORE THAN 1
54 of 58
Necessity good
income elasticity = 0 to +1
55 of 58
Inferior good
income elasticity = LESS THAN 1
56 of 58
Acid Test Ratio =
Current assets - stock / current liabilities
57 of 58
Absenteeism rate =
(Num. of days ill/total num. of days worked) x 100
58 of 58

## Other cards in this set

### Card 2

#### Front

Total revenue - total costs OR total contribution - Fixed costs

Profit =

### Card 3

#### Front

variable cost per unit x number of units sold

### Card 4

#### Front

Selling price per unit x number of units sold

### Card 5

#### Front

Number of shares issued x current share price