BUSINESS STUDIES FORMULAE

IGCSE Edexcel Business Studies important formulae

net cash flow

total cash inflow - total cash outflow

closing balance

net cash flow + opening balance

total costs

fixed costs + variable costs

total variable costs

variable cost per unit x quantity

total revenue

selling price x quantity sold

profit

total revenue - total costs

average cost

total costs / quantity

marketshare

business sales / total market sales x 100

break-even point

fixed costs / (selling price - variable costs per unit)

margin of safety

current output - break-even point

mark-up

profit / cost x 100

capital

assets - liabilities

net assets

total assets - total liabilities

net assets

capital employed

labour productivity

output / number of workers

capital productivity

output / capital employed

gross profit

sales revenue - cost of goods sold

operating profit

gross profit - expenses

retained profit

profit of the year after taxation - dividends

cost-plus pricing

cost + mark-up

working capital

current assets - current liabilities

acid test ratio

current assets - inventory / current liabilities

current ratio

current assets / current liabilities

operating profit margin

operating profit / revenue x 100

gross profit margin

gross profit / revenue x 100