Equations

• Market share

  (sales of a business/total sales in the market) x 100
• PED

  %change in quantity demanded/% change in price
• YED

  % Change in quantity demanded / % change in income
• Breakeven

  Total fixed costs / Contribution per unit
• Contribution per unit

  Selling price - variable cost per unit
• Total contribution

  contribution per unit x number of units sold
• Margin of safety

  Total output - breakeven point
• gross profit

  sales revenue - cost of sales
• gross profit margin

  (gross profit / sales revenue) x 100
• operating profit

  gross profit - expenses
• operating profit margin

  (operating profit / sales revenue) x 100
• working capital

  current assets - current liabilities
• productivity

  output per time period / input per time period
• sales volume

  sales revenue / price
• sales revenue

  price x quantity sold
• total costs

  fixed costs + variable costs
• total variable costs

  variable cost per unit x output
• profit

  total revenue - total costs
• net profit

  operating profit - interest/tax
• net profit margin


  (net profit / sales revenue) x 100
• current ratio

  current assets / current liabilities
• acid test ratio

  current assets - stock / current liabilities
• capital productivity

  output per time period / no. machines
• capacity utilisation

  (actual output / maximum output) x 100
• labour productivity

  output per time period / no. workers or hours worked
• gearing ratio

  (non current liabilities / capital employed) x 100
• Return On Capital Employed (ROCE)

  (operating profit x capital employed) x 100
• capital employed

  total equity + non-current liabilities
• labour turnover

  (No. employees leaving / average No. employees) x 100
• absenteeism

  (No. work days lost through absence / total possible days worked) x 100