business equations

• revenue =

  units sold x selling price
• profit =

  total revenue - total costs
• total costs =

  fixed costs + variable costs
• interest =

  starting balance x interest rate x time period
• interest (%) =

  (total interest repayment/borrowed amount) x 100
• break-even point =

  fixed costs/(selling price - variable cost per unit)
• margin of safety =

  actual sales - break-even point
• net cash flow =

  cash inflow - cash outflow
• opening balance =

  closing balance of previous period
• closing balance =


  opening balance + net cash flow
• gross profit =


  sales revenue - cost of sales
• gross profit margin (%) =

  (gross profit / sales revenue) x 100
• net profit =


  gross profit - other operating expenses and interest
• net profit margin (%) =

  (net profit / sales revenue) x 100
• average rate of return (%) =

  (average annual profit / cost of investment) x 100