Business Formulae

Market share

(Total sales of business / Total market sales) x 100

Market growth rate

(Current market size - Original market size) / (Original market size) x 100

PED

% change of quantity demanded / % change in price

YED

% change of quantity demanded / % change in income

% mark up (Cost plus pricing)

Unit Cost + Markup

Unit cost

Total costs / No. units

Quantity demanded and % change

(New - Old) / Old x (100)

Net cash flow

Inflows - Outflows

Opening balance

Closing balance of previous period

Closing balance

Opening balance + Net cash flow

Sales revenue

Price x Quantity sold

Sales volume

Sales revenue / selling price

Total costs

Variable cost + Fixed costs

Total variable costs

Average variable cost per unit x quantity (sales volume)

Breakeven

Fixed costs / Contribution per unit

Contribution per unit

Selling price per unit - Variable cost per unit

Total contribution

Contribution per unit x Quantity sold

Profit

Total Revenue - Total costs - Fixed costs

Variance

Actual figure - Budgeted figure

Gross profit

Sales revenue - Cost of sales

Operating profit

Gross profit - Overheads or fixed costs

Net profit

Operating profit - Finance costs and taxes

Profit margins

(Gross, Operating or Net profit / sales revenue) x 100

Current ratio

Current Assets / Current Liabilities

Acid test ratio

(Current assets - Inventory) / Current liabilities

Productivity

Output / Inputs per time period

Capacity utilisation

(Current output / Maximum output) x 100

Payback Month

(Outlay outstanding / monthly cash in year payback) x 12

Average Rate of Return

(net return/no.of years / Cost of investment) x 100

Present Value

Net cash flow x Discount factor

Net Present Value

Total Present Value (year 1 onwards) - Cost of Investment

Expected Monetary Value

Probability of outcome x expected profit/loss

Net Gain

EMV - Cost of Investment

Float

LFT - Duration - EST

Gearing

(non-current liabilities / Capital Employed) x 100

Capital Employed

Non-current Liabilities + Total Equity

ROCE

(Operating profit / Capital Employed) x 100

Labour Productivity

Output per period / Number of employees per period

Labour Turnover

(Number of staff leaving in a period / average number of staff) x 100s

Labour Retention

(staff not leaving / average number of staff in period) x 100

Absenteeism

(Total absences in period / possible total absences in period) x 100