Formulas

• Total costs


  Variable costs + Fixed costs
• profit 


  total revenue - total costs
• variable cost


  cost per unit x units sold
• total revenue


  price per unit x quantity sold
• market capitalisation


  number of issues shared x current share price
• Expected Value of a Decision

  (Pay-off A x Probability A) + (Pay-off B x Probability B)
• Net gain (decision tree)

  expected value - initial cost of decision
• What is market size? (volume)

  The quantity of goods and services produced in a particular market over a period of time
• What is market size? (value)

  The total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time
• What is sales volume?

  Quantity of goods and services produced by a particular business over a period of time
• What is sales value?

  The total sales revenue of a business over a period of time.
• Market growth(%) in year 'x'


  change in the size of market between year(x-1) and year x / size of the market in year (x-1) X100
• Sales growth % in year X

  Change in sales of product or business between year (X-1) and year X / Sales of product or business in year (X-1) x 100
• Market Share


  (Sales of a product or business / Total market sales) X 100
• price elasticity of demand

  percentage change in quality demand / percentage change price X 100
• Added value (value added)


  Sales revenue - costs of bought in goods and services
• Labour productivity

  output per time period / number of employees
• Capacity Utilisation (%)


  actual output in a given time period / maximum possible output in a given time period x 100
• Return on Investment (%)

  Return on investment (£) / Cost of the investment (£) x 100
• Unit Cost (average cost)


  total cost of production / no of output of units produced
• Gross Profit


  Sales revenue - cost of sales
• Profit From Operations (OPERATING PROFIT)


  sales revenue - cost of sales - operating expenses
• Profit For The Year


  operating profit + profit from other activities - net finance costs - tax
• Variance


  The difference between an actual and a budgeted figure.
• Favorable variance


  When costs are lower than expected or revenue is higher than expected. Or when profits are higher than the forecasts
• Adverse variance


  When costs are higher than expected or revenue is lower than expected. Or when profits are lower than the forecast.
• Contribution per unit


  selling price - variable cost per unit
• Total Contribution


  total revenue - total variable costs OR contribution per unit x number of units sold
• Break Even Output


  fixed costs / contribution per unit
• What is the break even point?

  The point at which total revenue and total costs are equal.
• Margin of Safety


  actual level of output - breakeven level of output
• Gross Profit Margin (%)

  gross profit/ sales revenue x 100
• Operating Profit Margin (%)


  operating profit / sales revenue x 100
• Profit for year Margin

  profit for the year / sales revenue x 100
• Labour Turnover


  (Number of staff leaving / average number of staff employed) x 100
• Employee Retention Rate ( for a specific time period)


  no of employees at the end of the period - no of leavers / no of employees at the end of a period x 100
• Employee Cost as a % of Turnover

  employee costs / sales turnover x100
• Labour Cost per unit


  labour costs / units of output
• Return on Capital Employed ( ROCE %)


  operating profit / total equity + non-current liabilities x 100(Where total equity + non-current liabilities = capital employed)
• Current Ratio


  current assets / current liabilities