Revenue (Sales or Turnover) = Selling price per unit × Number of units sold
Variable costs (Total variable costs) = Variable cost per unit × Number of units sold
Total costs = Fixed costs + Variable costs
Profit = Total revenue − Total costs OR Total contribution − Fixed costs
Market capitalisation of a business = Number of issued shares × Current share price
Expected value of a decision with two possible outcomes eg. A & B = [Pay-off of A × probability of A] + [Pay-off of B × probability of B]
Net gain = Expected value − Initial cost of decision
Market growth (%) = Change in the size of the market over a period / Original size of the market × 100
Market share (%) = Sales of one product OR brand OR business / Total sales in the market × 100
Added value = Sales revenue − costs of bought-in goods and services
Labour productivity = Output over a time period / Number of employees
Unit costs (average costs) = Total costs / Number of units of output
Capacity utilisation (%) = Actual output / Maximum possible output × 100
Return on investment (%) = Profit from the investment (£) / Cost of the investment (£) × 100
Gross Profit = Revenue − Cost of Sales
Profit from Operations = Operating profit = Gross profit − Operating Expenses
Profit for year = Operating profit + Profit from other activities − Net finance costs − Tax
Gross profit margin (%) = Gross profit / Revenue × 100
Profit from operations margin = Operating profit margin (%) = Operating profit / Revenue × 100
Profit for year margin (%) = Profit for year / Revenue × 100
Variance = Budgeted figure – actual figure
Contribution per unit = Selling price − Variable costs per unit
Total contribution = Contribution per unit × Units sold OR Total contribution = Total revenue − Total variable costs
Break-even output = Fixed costs / Contribution per unit
Margin of safety = Actual level of output − Break-even level of output
Labour turnover (%) = Number of staff leaving / Number of staff employed by the business × 100
Employee costs as percentage of turnover = Employee costs / Turnover × 100
Labour cost per unit = Labour costs / Units of output
Return on capital employed (ROCE)(%) = Operating profit / Total equity + non-current liabilities × 100
Current ratio = Current assets / Current liabilities
Gearing (%) = Non-current liabilities / Total equity + non-current liabilities ×100
Payables days = Payables / Cost of sales × 365
Receivables days = Receivables / Revenue × 365
Inventory turnover = Cost of sales / Average inventories held
Average rate of return (%) = Average annual return (£) / Initial cost of project (£) × 100
