Equations

• Sales revenue = Price x Quantity
• Total costs = Fixed costs + Variable costs
• Average/ Unit cost


  Cost of per unit per production
• Average cost = Total cost / Output
• Profit and loss = Total revenue - Total costs
• Unit contribution Formula:

  Contribution per unit = Selling price - Variable costs
• Total contribution formula

  Total contribution = Total revenue - Total variable costs

  Total contribution = Unit contribution x Number of units sold
• Calculating break even using contribution

  Break even output = Fixed costs / Contribution
• Profit


  Total costs - revenue
• Gross profit


  Revenue - turnover and cost of sales
• Turnover


  Price x the quantity of sales
• Operating profit


  Gross profit - overheads
• Net profit


  Operating profit - interest + (exceptional cost)
• Gross profit margin


  (Gross profit/Revenue) x 100%
• Operating profit margins

  (operating profit/ revenue) x 100%
• Net profit margin


  (net profit before tax/Revenue) x 100%
• Net assets


  Total liabilities - total assets
• Current ratio


  Current assets / current liabilities
• Acid test ratio


  (Current assets - inventories)/ Current liabilities
• Working capital


  Current assets - Current liabilities
• Capital productivity


  Output/capital employed
• Measuring capacity utilisation


  (Current output/ maximum possible output) x 100%