Formulas

• $Total costs$


  $Fixed costs +$$Variable costs$
• $Profit$


  $TR - TC - FC$
• Variable costs (TVC) 


  Variable cost per unit × Number of units sold
• Total revenue 


  Selling price per unit × Number of units sold
• Market capitalisation of a business 


  Number of issued shares × Current share price
• Gross Profit 


  Sales Revenue - Cost of Sales
• Profit for year


  Operating profit + Profit from other activities - Net finance costs -Tax
• Contribution per unit


  Selling price - Variable costs per unit
• Total contribution


  Contribution per unit × Units produced
• Total contribution


  Total revenue - Total variable costs
• Margin of safety


  Actual level of output - Breakeven level of output
• Decision tree Net gain

  Expected value - Initial cost of decision
• Market size volume

  The quantity of goods and services produced in a particular market over a period of time usually one year .
• Market size value

  The total sales revenue produced in a particular market over a period of time
• Sales volume

  The quantity of goods and services produced by a particular business over a period of time
• Sales value

  The total sales revenue of a particular business over a period of time usually one year .
• Market growth % in year

  Change in size of the market between year (X-1) and year X / Size of the market in year (X-1)
• Sales growth % in year X

  Change in sales of product between year X-1 and year X /Sales of product in year (X-1) x 100
• Market share %

  Sales of one product OR business / Total sales in the market x 100
• Added value

  Sales revenue - costs of bought-in goods and services.
• Labour productivity

  Output per time period / Number of employees
• Unit costs (average costs)


  Unit costs average costs / Number of units of output produced
• Capacity utilisation (%)

  Actual output in time period / Maximum possible output time period x 100
• Return on investment (%)

  Return on investment (£) / Cost of the investment (£) x 100
• Operating profit

  Sales Revenue - Cost of Sales - Operating Expenses
• Break-even output

  Fixed costs / Contribution per unit × 100
• Gross profit margin %

  Gross profit / Sales revenue × 100
• Operating profit margin %

  Operating profit / Sales revenue × 100
• Profit for year margin %

  Profit for year / Sales revenue × 100
• Labour turnover %

  Number of staff leaving during the year / Average number of staff employed during the year × 100
• Employee retention rate % for a particular time period

  Number of employees at end -number of leavers /

  Number of employees at end×100
• Labour cost per unit

  Labour costs / Units of output
• ROCE %

  Operating profit / Total equity plus non-current liabilities × 100
• Current ratio

  Current assets / Current liabilities
• Gearing %

  Non-current liabilities / Total equity plus non-current liabilities ×100
• Payables days

  Payables / Cost of sales ×365
• Receivables days

  Receivables / Sales revenue x 365
• Inventory turnover

  Cost of goods sold / Average inventories held