Unit 5 - Finance

• Variance = Actual - Budget
• Contribution = Selling Price per Unit - Variable Cost per Unit
• Total Contribution = Contribution per Unit x Number of Units Sold
• Break Even = Fixed Cost/Contribution per Unit
• Margin of Safety = Actual Output - Break Even Output
• Gross Profit = Sales Revenue - Cost of Sales
• Gross Profit Margin = Gross Profit/Revenue x 100
• Operating Profit = Gross Profit - Operating Expenses
• Operating Profit Margin = Operating Profit/Revenue x 100
• Profit for the Year Margin = Profit for the Year/Sales Revenue x 100
• Return on Investment = Operating Profit/Capital Employed x 100
• Net Cash Flow = Total Inflows - Total Outflows
• Closing Balance = Opening Balance + Net Cash Flow
• Finance -the management of the investment needed to open,run, and grow a business
• Capital Structure - a mix of finance provided from equity