Formulas

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Total costs
Fixed costs + Variable costs
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Profit
Total revenue - Total costs OR Total contribution - Fixed costs
2 of 39
Variable costs (Total variable costs)
Variable cost per unit x Number of units sold
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Total revenue (Sales revenue or Turnover)
Selling price per unit x Number of units sold
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Market capitalisation of a business
Number of issued shares x Current share price
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Expected value of a decision with two possible outcomes - A and B
(Pay off of A x Probability of A) + (Pay off of B x Probability of B) N.B. Probability of A + Probability of B = 1.0
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In a decision tree net gain
Expected value - Initial cost of decision
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Market growth % in year X
Change in the size of the market between year (X-1) and year X/Size of the market in year (X-1) x 100
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Sales growth % in year X
Change in sales of product or business between year (X-1) and year X/Sales of product or business in year (X-1) x 100
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Market share %
Sales of one product OR brand OR business/Total sales in the market x 100
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Price elasticity of demand
Percentage change in quantity demand/Percentage change price x 100
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Added value (value added)
Sales revenue - costs of bought in goods and services
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Labour productivity
Output per time period/Number of employees
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Unit costs (average costs)
Total costs of production/Number of units of output produced
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Capacity utilisation (%)
Actual output in a given time period/Maximum possible output in a given time period x 100
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Return on investment (%)
Return on investment (£)/Cost of the investment (£) x 100
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Gross profit
Sales revenue - Cost of sales
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Operating profit
Sales revenue - Cost of sales - Operating expenses
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Profit for year
Operating profit + Profit from other activities - Net finance costs - Tax
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Contribution per unit
Selling price - Variable costs per unit
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Total contribution (1)
Contribution per unit x Units produced or sold
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Total contribution (2)
Total revenue - Total variable costs
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Break even output
Fixed costs/Contribution per unit
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Margin of safety
Actual level of output - Break even level of output
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Gross profit margin (%)
Gross profit/Sales revenue x 100
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Profit from operations margin
Operating profit margin (%) =Operating profit/Sales revenue x 100
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Profit for year margin (%)
Profit for year/Sales revenue x 100
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Labour turnover (%)
Number of staff leaving during the year/Average number of staff employed by the business during the year x 100
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Employee retention rate (%) for a particular time period
Number of employees at end of period - number of leavers/Number of employees at end of period x 100
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Labour cost per unit
Labour costs/Units of output
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Return on capital employed (%)
Operating profit/Total equity plus non-current liabilities x 100
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Capital employed
Total equity + non-current liabilities
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Current ratio
Current assets/Current liabilities
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Gearing (%)
Non-current liabilities/Total equity + Non-current liabilities x 100
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Payables days
Payables/Cost of sales x 365
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Receivables days
Receivables/Sales revenue x 365
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Inventory turnover
Cost of goods sold/Average inventories held
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Average rate of return (%)
Net return from project (£)/Number of years/Initial cost of project (£) x 100
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Net from return from project
Total income from project over its lifetime - Total costs of project over its lifetime, including the initial cost of the project
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Other cards in this set

Card 2

Front

Profit

Back

Total revenue - Total costs OR Total contribution - Fixed costs

Card 3

Front

Variable costs (Total variable costs)

Back

Preview of the front of card 3

Card 4

Front

Total revenue (Sales revenue or Turnover)

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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