Business equations

• Total Costs


  TC=FC+VC
• Revenue


  Revenue = price x quantity
• Break even in unit


  Break even point in unit = fixed cost / (sales price - VC)
• Break even in cost / revenue

  Break even cost / revenue = break even point x sales price
• Margin of Safety


  Margin of safety = actual or budgeted sales - break even sales
• Interest (on loans)


  Interest in % = total repayment - borrowed amount / borrowed amount x 100
• Net cash-flow


  Net cash-flow = cash inflows - cash outflows in a given period
• Opening balance


  Opening balance = closing balance of previous period
• Closing balance


  Closing balance = opening balance + net cash-flow
• Gross Profit 


  Gross profit = sales revenue - cost of sales
• Gross Profit Margin


  Gross profit margin (%) = gross profit / sales revenue x 100
• Net Profit 


  Net profit = gross profit - other operating expenses and interest
• Net Profit Margin 


  Net profit margin (%) = net profit / sales revenue x 100
• ARR


  ARR (%) = average annual profit (total profit / no. of years) / cost of investment x 100