# Formulae and key data

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- Created by: charliedee
- Created on: 20-04-16 19:57

Give the formula for total costs

Total costs = Fixed costs + Variable costs

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Give the formula for profit (NOT USING CONTRIBUTION)

Total revenue - Total costs

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Give the formula for profit using contribution

Total contribution - Fixed costs

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Give the formula for total revenue

Selling price per unit x No. units sold

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How do you work out the market capitalisation of a business?

No. of issued shares x Current share price

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Formula to work out net gain from a decision tree

Expected value - Initial cost of decision

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What is market size in terms of volume?

The quantity of goods and services produced in a particular market over a period of time

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What is market size in terms of value?

The total sales revenue generated from selling all of the goods and services produced by a particular market over a period of time

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What is sales volume?

The total sales revenue produced by a particular business over a period of time

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Formula to work out % market growth in a year?

Change in size of the market between year (X-1) and year X / size of market in year (X-1) x 100

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How do you work out % sales growth in a year?

Change in sales between year (X-1) and year X / sales of product in year (X-1) x 100

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Formula to work out % market share

Sales of product OR brand Or business / total sales of the market x 100

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How do you work out price elasticity of demand?

% change in quantity demand / % change price

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To be price inelastic what range does the coefficient have to be in?

0 to -1

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To be price elastic what range does the coefficient have to be in?

-1 to -infinity

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Formula for added value

Sales revenue - costs of bought in goods and services

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Formula for labour productivity

Output per time period / no. of employees

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How do you work out unit costs?

Total costs of production / no. of units of output produced

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Formula for % capacity utilisation

Actual output in a given time period / maximum possible output in a given time x 100

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Formula for % return on investment

Return on investment (£) / cost of the investment (£) x 100

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Formula for gross profit

Sales revenue - cost of sales

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How do you work out profit from operations (operating profit)?

Gross profit - operating expenses

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Formula to work out profit for the year

Operating profit + profit from other activities - net finance costs - tax

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What is variance?

The difference between an actual and budgeted figure

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What is favourable variance for profit?

Profits being higher than forecast

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What is adverse variance for profit?

Profits being lower than forecast

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Formula for contribution per unit

Selling price - variable costs per unit

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How do you work out total contribution?

Contribution per unit x units produced or sold OR total revenue - total variable costs

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How do you work out break-even output?

Fixed costs / contribution per unit

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On a break-even chart how do you find the break-even point?

The point at which the total revenue line and the total cost line meet

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How do you work out margin of safety?

Actual level of output - breakeven level of output

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Formula to work out % gross profit margin

Gross profit / sales revenue x 100

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How do you work out the operating profit margin (%)?

Operating profit / sales revenue x 100

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Formula to work out profit for year margin (%)?

Profit for year / sales revenue x 100

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How do you work out labour turnover?

No. staff leaving during year / average no. staff employed during year x 100

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Formula for employee retention rate (%) for a particular time period

(No. employees at end of period - number of leavers) / no. employees at end of period x 100

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Formula for labour cost per unit

Labour costs / units of output

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How do you work out return on capital employed (ROCE) as a %?

operating profit / (total equity + non-current liabilities) x 100

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Formula for current ratio

Current assets / current liabilities

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Formula for gearing (%)

Non-current liabilities / (total equity + non-current liabilities) x 100

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Where payables = creditors, what is the formula for payables days?

Receivables / sales revenue x 365

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Where receivables = debtors, what is the formula for receivables days?

Receivables / sales revenue x 365

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Formula for inventory turnover

Cost of goods sold / average inventories held

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Formula for rate of return (%)

(Net return from project (£) / no. years) / initial cost of project (£) x 100

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## Other cards in this set

### Card 2

#### Front

Give the formula for profit (NOT USING CONTRIBUTION)

#### Back

Total revenue - Total costs

### Card 3

#### Front

Give the formula for profit using contribution

#### Back

### Card 4

#### Front

Give the formula for total revenue

#### Back

### Card 5

#### Front

How do you work out the market capitalisation of a business?

#### Back

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