Equations for calculations

• Revenue/Turnover = Quantity Sold x Price
• Gross Profit = Revenue – Cost of Sales
• Cost of Sales = Opening Stock + Purchases – Closing Stock
• Operating Profit = Revenue – Cost of Sales & Expenses
• Net Profit = Revenue – Cost of Sales & Expenses & Tax, Interest & Dividends
• Gross Profit margin = Gross Profit / revenue x 100 = %
• Net Profit Margin = Net profit / revenue x 100 = %
• Operating Profit Margin = Operating Profit / revenue x 100 = %
• Current Ratio = Current Assets / Current liabilities = :1
• Acid Test Ratio = Current Assets – Stock/ Current liabilities = :1
• Working Capital = Current Assets – Current Liabilities
• Net Assets = Total Assets – Total Liabilities
• Total Costs = Fixed Costs + Variable Costs
• Contribution per unit = Selling Price per unit – Variable Cost per unit
• Total Contribution = Total Revenue – Total Variable Costs
• Break-Even Point = Fixed Costs / contribution (SP - VC)=units
• Break-Even Revenue = Break-Even Output x Selling Price
• Margin of safety = Actual/Projected Output – Break-Even Point
• Variance = Budget Figures – Actual Figures
• Net Cash Flow = Total Inflows – Total Outflows
• Closing Balance = Opening balance + Net Cash Flow
• Capacity utilisation= ( Actual output/ Maximum output) x 100