Studied by 2 people
Revenue
Selling price per unit x quantity of units sold
Total variable costs
Variable cost per unit x number of units sold
Total costs
Fixed costs + variable costs
Profit
Total revenue - total costs or
(Number of Sales x price) - costs
Market capitalisation
Number of issued shares x Current share price
Interest rates
Calculated as a percentage of the amount borrowed
Expected value of an outcome
Probability of the outcome occurring x the pay-off the business can expect to get
Expected value of a course of action
Add the Ev’s of different outcomes together
Net gain
Expected value - initial costs
Market growth (%)
(New Market size - old market size / old market size) x 100
Market share (%)
(Sales / total market size) x 100
Sales growth (%)
(Sales this year - Sales last year / Sales last year) x 100
Price elasticity of demand
% change in quantity demanded / % change in price
Sales revenue
Price of product x quantity sold
Income elasticity of demand
% change in quantity demanded / % change in real income
Added value
sales revenue - cost of bought-in goods and services
Capacity utilisation (%)
(Output / capacity) x 100
Unit cost
Total costs / units output
Labour productivity
Output per period / number of employees
Re-order level
Lead Time (in days) x average daily usage + buffer stock level
Return on investment (%)
(Return on investment (£) / cost of investment (£) ) x 100
Percentage change in profit
(Current year’s profit - previous years profit / previous years profit) x 100
Gross profit
Sales revenue - cost of sales
Operating profit
Sales revenue - cost of sales - operating expenses
Profit for the year
Operating profit + other profit - net finance costs - tax
Gross profit margin (%)
(Gross profit / sales revenue) x 100
Operating profit margin (%)
(Operating profit / sales revenue) x 100
Profit for the year margin (%)
(Profit for the year / sales revenue) x 100
Contribution per unit
Selling price per unit - variable costs per unit
Total contribution
Total revenue - total variable costs or
Contribution per unit x number of units sold
Break-even output
Fixed costs / contribution per unit
Margin of safety
Actual output - break-even output
Labour cost per unit
Labour costs / units of output
