Formulas

• Gross Profit = Sales – Cost of Goods Sold
• Net Profit = Gross Profit – Expenses
• Gross Profit Margin = (Gross Profit ÷ Revenue) x 100
• Net Profit Margin = (Net Profit ÷ Revenue) x 100
• Revenue = Quantity Sold x Selling Price
• Productivity = Output ÷ Inputs
• Labour Productivity = Output ÷ Number of Employees
• Working Capital = Current Assets – Current Liabilities
• Capital Employed (Shareholders Funds) = Total Assets – Total Liabilities
• Total Costs = Fixed Costs + Variable Costs
• Profit = Total Revenue – Total Costs
• Average Costs = Total Costs ÷ Total Number of Units Produced
• Break Even = Fixed Costs ÷ Contribution
• Contribution = Selling Price – Variable Cost Per Item
• Margin of Safety = Actual Output – Break Even Output
• Return on Capital Employed (ROCE) = Net Profit ÷ Capital Invested x 100
• Current Ratio = Current Assets ÷ Current Liabilities
• Acid Test Ratio (also known as Quick Ratio) = Current Assets – Inventory (or stock) ÷ Current Liabilities