Formulas

• How do you calculate total fixed costs?

  Total fixed costs = total costs - total variable costs
• What is the formula for total costs?

  Total costs = total fixed costs + total variable costs
• What is the formula for total variable costs?

  Total variable costs = total costs - total fixed costs
• What is the formula for revenue?

  Revenue = selling price per unit × quantity sold
• How do you calculate profit or loss?

  Profit/loss = revenue – total costs
• What is the formula for average unit costs?

  Average unit costs = total costs / output
• What is the formula for net cash flow?

  Net cash flow = total cash inflows – total cash outflows
• How do you calculate the opening balance?

  Opening balance = closing balance of the previous period
• What is the formula for closing balance?

  Closing balance = opening balance + net cash flow
• What defines the break-even point from a break-even chart?

  Break-even point: when total revenue = total costs
• How do you calculate profit or loss from a break-even chart?

  Profit/loss = total revenue - total costs
• What is the formula for margin of safety?

  Margin of safety = actual or budgeted output – break-even point
• How do you calculate the average rate of return?

  Average rate of return (%) = average annual profit / cost of investment × 100
• What is the formula for gross profit?

  Gross profit = sales revenue − cost of sales
• How do you calculate gross profit margin?

  Gross profit margin (%) = gross profit × 100 / sales revenue
• What is the formula for operating profit?

  Operating profit = gross profit − overheads
• How do you calculate net profit?

  Net profit = gross profit − overheads, tax and interest
• What is the formula for net profit margin?

  Net profit margin (%) = net profit × 100 / sales revenue
• How do you calculate net current assets?

  Net current assets = total current assets – total current liabilities
• What is the formula for net assets?

  Net assets = non-current assets + net current assets – non-current liabilities
• How do you calculate total equity?

  Total equity = value of net assets
• What is the formula for market share?

  Market share = sales of one product or brand / total sales of market × 100
• How do you calculate market size?

  Market size = total volume of sales of a product