business formulae

revenue

selling price x quantity sold

total variable costs

variable costs per unit x units sold

total costs

fixes costs + variable costs

profit (both)

total revenue - total costs OR total contribution - fixed costs

Market capitalisation of a business

number of issued shares x current share price

Expected value of a decision with 2 possible outcomes

(pay off of A x probability of A) + (pay off of B probability of B)

Net gain

Expected value - initial cost of decision

market growth (%)

change in market size/original size of market x100

added value

Sales revenue - costs of bought in goods and services

labour productivity

Output over a time period / number of employees

Unit costs (average costs)

Total costs / number of units of output

capacity utilisation

actual output/maximum possible output x 100

return on investment

Profit from investment / cost of investment x 100

Gross profit

Revenue - cost of sales

Operational profit

gross profit - operational expenses

Profit for the year

operating profit + profit from other activities - net finance costs - tax

Gross profit margin

Gross profit / revenue x 100

Operational profit margin

operational profit / revenue x 100

Profit for year margin

Profit for year / revenue x 100

variance

budgeted figure - actual figure

Contribution per unit

Selling price - variable cost per unit

Total contribution (both)

contribution per unit x units sold OR total revenue - Total variable costs

break even output

Fixed costs / contribution per unit

margin of safety

actual level of output - break even level of output

labour turnover

number of staff leaving / number of staff employed x 100

employee costs as a percentage of turnover

employee costs / turnover x 100

labour costs per unit

labour costs / units of output