Theme 2 calculations (business)

• Total Revenue


  Selling price per unit x Units sold
• Total Cost


  Fixed cost + total variable cost
• Profit


  Total revenue - total cost
• Gross profit


  Total revenue - cost of sales
• Cost per unit (CPU)


  Total costs/output
• Contribution per unit


  selling price per unit - variable cost per unit
• Break even output


  Fixed cost/contribution per unit (Also equal to when total revenue=total costs)
• Margin of safety


  Total output - breakeven output
• Profit margin


  (revenue / profit) x 100
• Gross profit margin


  (Gross profit/sales revenue) x 100
• Operating profit margin


  (Operating profit / sales revenue) x 100
• Net profit margin (profits for the year)


  (Net profit / sales revenue) x 100
• Current Ratio (Liquidity Ratio)


  Current assets / current liabilities

  (X : 1) (ideal is 1.5-2 : 1)
• Acid Test (Liquidity Ratio)


  (Current Assets - Stock) / Current Liabilities

  (X : 1) (ideal is 1 : 1)
• Income statement structure


  (Revenue)

  (Cost of sales)

  Gross profit.

  (Fixed overhead)

  Operating profit.

  (Net financing cost)

  Profit before tax

  (Cooperation tax (19%))

  Profit for the year
• Total variable cost


  Variable cost per unit x number of units sold
• Total contribution


  Contribution per unit x number of units
• Net cash flow


  Inflows - outflows
• Opening balance


  Closing balance from previous month
• Closing balance


  Opening balance + net cash flow
• Variance


  Actual value - budgets valué

  (Favourable/adverse)
• Productivity


  Total output / number of worker)s or (output / time)
• Capacity utilisation


  (Current output / maximum output) x 100
• Stock control diagram


  Max level, min level, reorder level, lead time & buffer stock

  (Stock level (y-axis) & time (x-axis))

  
• Operating profit


  Gross profit - fixed overheads
• Net profit


  (Operating profit - net financing cost) - tax