Formulas

• Revenue = selling price per unit X number of units sold
• Total variable costs = variable costs per unit x number of units sold
• Total costs = fixed costs + variable costs
• Profit = total revenue - total costs
• Profit = total contribution - fixed costs
• Market capitalisation = number of issued shares X current share price
• decision trees:

  • expected value = probability X Pay
  • net gain =expected value - initial costs of decision
• Decision tree:

  1. Multiply
  2. Add
  3. Deduct
• Market growth (%) = change in size of market over a period /

  Original size of the market × 100
• Market Share (%) = sales of business / total sales of the market X 100
• added value = sales revenue - cost of bought-in goods and services
• Labour productivity = output over a time period / number of employees
• unit costs = total costs / number of units of output
• Capacity utilisation (%) = actual output / Max possible output X 100
• Return on investment (%) = profit from the investment / cost of the investment x 100
• Gross profit = revenue - costs of sales
• Operating profit = gross profit - expenses
• Profit for year = Operating profit + profit from other activities - net finance costs - tax
• Gross profit margains (%) = gross profit / sales revenue x 100
• Operating profit margin (%) = Operating profit / Revenue x 100
• profit for year margains (%) = profit for year / revenue X 100
• variance = budgeted figure - actual figure
• Contribution per unit = selling price - variable costs per unit
• Total contribution = contribution per unit X units sold
• Total contribution (2) = total revenue - total variable costs
• Break-even output = fixed costs / contribution per unit
• Margin of safety = Actual output - break-even level of output
• Labour turnover (%) = number of staff leaving / number of staff employed by the business X 100
• Employee retention rate (%) = Number of employees at the end of the period / Number of employees at the beginning of the period x 100
• Employee costs as a percentage of turnover = employee costs/ turnover X 100
• Labour costs per unit = labour costs / units of output
• Current ratio = current assets /current liabilites
• Payable Days = Payables / costs of sales x 365
• Receivable days = receivables/revenue X 365
• Inventory turnover = cost of sales / average inventories held
• Average rate of return (%) = Average annual return (£) / Initial cost of project (£)
• Price Elasticity of Demand (PED) =% Change in quantity Demand / % Change in Price
• Income Elasticity of Demand (YED) = % change in demand / % change in income
• ROCE = operating profit / total equity + non-current liabilities (capital employed) X 100
• gearing - non-current liabilities/ total equity + non-current liabilities (capital employed) X 100