Equations

• Profit formula

  sales revenue - total costs
• net current assets formula

  current assets - current liabilities
• Total revenue formula

  quantity of goods sold x selling £ per unit
• Break even formula

  Fixed costs/contribution
• Contribution per unit formula

  selling £ - variable costs per unit
• Total contribution formula

  Contribution per unit x number of units sold
• Margin of safety formula

  Sales - break-even level output
• Months to break even formula

  Break-even units/units produced per month
• Net assets formula

  Total assets - total liabilities
• Closing balance formula

  Net cash flow + opening balance
• GP margin formula

  GP/revenue x 100
• Mark-up formula

  GP/cost of sales x 100
• NP margin formula

  NP/revenue x 100
• ROCE formula

  NP/capital employed x 100
• Current ratio formula

  current assets/current liabilities
• Liquid capital ratio formula

  current assets - inventory/current liabilities
• Trade receivable days formula

  trade receivables/credit sales x 365
• Trade payables formula

  trade payables/credit purchases x 365
• Inventory turnover formula

  average inventory /cost of sales x 365
• Capital employed formula

  Opening Capital + Profit of the Year less drawings
• Cost of goods sold formula

  Opening Inventory + Purchases - Closing Inventory
• Profit/Loss of the year formula

  Gross profit - expenses + other income
• Net book value formula

  Cost - depreciation
• Net cash flow formula

  Inflows - outflows
• Cost per unit formula

  Total cost/output
• Current Assets (Statement of Financial Position)

  Cash + Receivables + Inventories + Prepayments
• Current Liabilities (Statement of Financial Position)

  Trade Payables + Overdraft + Accruals
• Gross profit formula 


  Revenue - costs of good sold
• Net profit formula

  GP - operating expenses and taxes