Business - Themes 1&2 Calculations

Sales revenue

Sales revenue = selling price × sales volume

Sales volume

Sales volume = sales revenue ÷ selling price

Market share %

Market share % = total sales of a firm ÷ total sales in market × 100

Percentage increase

Percentage increase = new number − original number ÷ original number × 100

Percentage decrease

Percentage decrease = original number − new number ÷ original number × 100

Price elasticity of demand PED

PED = percentage change in quantity demanded ÷ percentage change in price

Income elasticity of demand YED

YED = percentage change in quantity demanded ÷ percentage change in income

Contribution per unit

Contribution = selling price per unit − variable cost per unit

Total contribution

Total contribution = contribution per unit × number of units sold

Total costs

Total costs = fixed costs + variable costs

Profit

Profit = total revenue − total costs

Profit alternative method

Profit = total contribution − fixed costs

Break even output

Break even output = total fixed costs ÷ contribution per unit

Margin of safety

Margin of safety = current sales output − break even output

Gross profit

Gross profit = revenue − total variable costs

Operating profit

Operating profit = gross profit − fixed costs

Budget variance

Budget variance = actual figure − budgeted figure

Net cash flow

Net cash flow = cash inflow − cash outflow

Labour productivity

Labour productivity = output per time period ÷ number of employees

Capacity utilisation

Capacity utilisation = actual output ÷ maximum possible output × 100

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