Business Formulae

Inventory Turnover

COGS / av number of inventories held

Breakeven

FC / Contribution

Contribution

Selling price - variable costs per unit

Current Ratio

Current Assets / Current liabilities

Market Capitalisation

No of shares issued x Current share price

Market share %

Sales of a product/business / Total sales in market

Added value

Sales revenue / COGS

Labour productivity

Output over a time period / Number of employees

ROI %

Profit of investment / Initial cost

Gross profit

Revenue - COGS

Operational profit

Gross profit - operating expenses

Profit for the year

Operating profit (+other profits) - Net finance costs - tax

Profit margin %

Profit / revenue

Variance

Budgeted figure - Actual figure

Total contribution

Total revenue - total variable costs

Total contribution

Profit + Fixed Costs

Labour turnover %

no of staff leaving / no of staff employed

ROCE %

Operating profit / Capital employed

Capital employed

total equity + NCL

Gearing %

NCL / Capital employed

Payable days

Payables / COGS x 365

Receivable days

Receivables / Revenue x 365

ARR %

Average annual return / initial cost