Business Formulae

• Gross profit = sales revenue - cost of goods sold
• Total costs = total fixed costs (TFC) + total variable costs (TVC)
• Revenue = price x quantity
• Break even point in units = fixed cost/(sales price - variable cost)
• Break even in costs/revenue = break even points in units x sales price
• Margin of safety = actual or budgeted sales - break even sales
• Interest (on loans) in % = (total repayment - borrowed) (amount/borrowed amount ) x 100
• Net cash - flow = cash inflows -cash outflows in a given period
• Opening balance = closing balance of the 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 (total profit / no.of years)] /[cost of investment ] x 100