Business Key Theme 2

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How do you work out total costs?
Fixed costs + variable costs
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How do you work out total variable costs?
Variable cost per item X quantity produced
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How do you work out profit?
Revenue - total costs of sales
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How do you work out revenue?
Quantity sold X average selling price
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How do you work out contribution?
Selling price - variable costs
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How do you work out the total contribution?
Contribution per unit X number of units sold
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How do you find the breakeven point?
Fixed costs ÷ contribution per unit
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How do you work out net cash flow? CASHFLOW
Total inflows - total outflows
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How do you work out the closing balance? CASHFLOW
Opening balance + net cash flow
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How do you work out the cost of sales? PROFITABILITY
Opening stock + purchases - closing stock
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How do you work out gross profit? PROFITABILITY
Sales revenue - cost of sales
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How do you work out the gross profit margin? PROFITABILITY
Gross profit ÷ sales revenue X 100
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How do you work out operating profit? PROFITABILITY
Gross profit - expenses
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How do you work out the operating profit margin? PROFITABILITY
Operating profit ÷ sales revenue X 100
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How do you work out net profit? PROFITABILITY
Operating profit- other expenses
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How do you work out the net profit margin? PROFITABILITY
Net profit ÷ sales revenue X 100
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How do you work out current ratio? LIQUIDITY
Current assets ÷ current liabilities
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How do you work out the acid test ratio? LIQUIDITY
(Current assets - stock) ÷ current liabilities
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How do you work out productivity?
Output ÷ inputs per time period
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How do you work out capacity utilisation?
Actual level of output ÷ maximum possible output X 100
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Other cards in this set

Card 2

Front

How do you work out total variable costs?

Back

Variable cost per item X quantity produced

Card 3

Front

How do you work out profit?

Back

Preview of the front of card 3

Card 4

Front

How do you work out revenue?

Back

Preview of the front of card 4

Card 5

Front

How do you work out contribution?

Back

Preview of the front of card 5
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