Formulae

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Total costs
Fixed costs + Variable costs
1 of 44
Profit
Total revenue - Total costs
2 of 44
Total variable costs
Variable cost per unit x Number of units sold
3 of 44
Total revenue
Selling price per unit x Number of units sold
4 of 44
Market capitalisation of a business
Number of issued shares x Current share price
5 of 44
Net Gain (in a decision tree)
Expected value - Initial cost of decision
6 of 44
Market size (volume)
Quantity of goods and services produced in a particular market over a period of time
7 of 44
Market size (value)
is the total sales revenue generated from selling all the goods and services produced in a particular market over a period of time
8 of 44
Sales Volume
The quantity of goods and services produced by a particular business over a period of time
9 of 44
Sales Value
The total sales revenue of a particular business over a period of time
10 of 44
Market Growth
Change in the size of the market / Size of the market in year 1 x 100
11 of 44
Sales Growth
Change in sales of a product/ Sales of product in year 1 x 100
12 of 44
Market Share (%)
Sales of business / Total sales in the market x 100
13 of 44
Price elasticity of demand
Percentage change in quantity demand / Percentage change in price
14 of 44
Price inelastic
Coefficient in the range 0 to -1
15 of 44
Price elastic
Coefficient in the range -1 to -infinity
16 of 44
Added value
Sales revenue - costs of bought in goods and services
17 of 44
Labour productivity
Output per time period / Number of employees
18 of 44
Unit costs
Total costs of production / Number of units of output produced
19 of 44
Capacity utilisation (%)
Actual output in a given time period / Maximum possible output in a time period x 100
20 of 44
Return on investment (%)
Return on investment (£) / Cost of the investment (£) x100
21 of 44
Gross Profit
Sales revenue - Cost of sales
22 of 44
Operating profit
Sales Revenue - Cost of sales - Operating expenses
23 of 44
Profit for year
Operating profit + Profit from other activities - Net finance costs - Tax
24 of 44
Variance
The difference between an actual and budgeted figure
25 of 44
Contribution per unit
Selling price - Variable costs per unit
26 of 44
Total Contribution
Contribution x Units produced or sold
27 of 44
Total Contribution
Total revenue - Total variable costs
28 of 44
Break even output
Fixed costs / contribution per unit
29 of 44
Margin of safety
Actual level of output - Break even level of output
30 of 44
Gross profit margin (%)
Gross profit / Sales revenue x 100
31 of 44
Operating profit margin (%)
Operating profit / Sales revenue x 100
32 of 44
Profit for year margin (%)
Profit for year / Sales revenue x 100
33 of 44
Labour turnover (%)
Number of staff leaving during the year / Average number of staff employed by the business during the year x 100
34 of 44
Employee retention rate (%)
(Number of employees at end of period - number of leavers) / Number of employees at end of period x 100
35 of 44
Employee costs as percentage of turnover
Employee costs / sales turnover x 100
36 of 44
Labour costs per unit
Labour costs / Units of output
37 of 44
Return on capital employed (%)
Operating profit / (Total equity + non current liabilities) x 100
38 of 44
Current ratio
Current assets / Current liabilities
39 of 44
Gearing (%)
Non - current liabilities / (Total equity + non current liabilities) x 100
40 of 44
Payables days
Payables / cost of sales x 365
41 of 44
Receivables days
Receivables / Sales revenue x 365
42 of 44
Inventory turnover
Costs of goods sold / Average inventories held
43 of 44
Average rate of return (%)
Net return from project (£) or number of years / Initial cost of project x 100
44 of 44

Other cards in this set

Card 2

Front

Profit

Back

Total revenue - Total costs

Card 3

Front

Total variable costs

Back

Preview of the front of card 3

Card 4

Front

Total revenue

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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