Equations

• market share equation?

  sales of a business/total market sales x100
• value of a market equation?

  selling price x number of units sold
• market growth equation?

  change/original x100
• what are index numbers?


  they show percentage change and can also be used to simplify comparisons
• rules for index numbers

  • the original value is always equal to 100
  • they have no units
  • change/original x100
• what is the equation for net cash flow


  cash inflow - cash outflow
• What is the equation for added value?


  price - unit cost
• what is the equation for total revenue?


  price x units sold
• what is the equation for PED?


  PED = (% change in quantity demanded) / (% change in price)
• what is the equation for YED?


  (% change in quantity demanded)/(%change in income)
• what is the equation for total costs?


  fixed costs + variable costs
• what is the equation for contribution per unit?


  selling price - variable costs
• what is the equation for break even point?


  fixed costs/contribution per unit
• what is the equation for margin of safety?


  actual output - break even output
• what is the equation for profit that includes contribution?


  total contribution - fixed costs
• what is the equation for profit that includes margin of safety?


  margin of safety * contribution per unit
• gross profit equation?


  sales revenue - cost of sales
• operating profit equation?


  gross profit - expenses
• net profit equation?


  operating profit +/- interest and/or +/- exceptional items
• sales revenue equation?


  selling price x quantity sold
• labour productivity?


  output per time period/number of employees
• labour turnover?


  number of staff leaving/average number of staff x100
• labour retention?


  number of employees serving for more than one year/average number of staff x100
• absenteeism?


  number of days lost to absence/total potential working days x100
• capital employed?

  non-current liabilities + total equity
• gearing ration?

  non-current liabilities/capital employed x100
• ROCE equation?

  operating profit/ capital employed. x100
• what is the unit cost equation?

  total production costs/total output
• capacity utilisation equation?

  current output/ maximum possible output x100