Business formulae
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Description and Tags
Formulae needed for AQA A-Level Business studies
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42 Terms
Total Costs
Fixed costs + Variable costs
Profit
Total revenue - Total costs OR Total contribution - Fixed costs
Total variable costs
Variable cost per unit ร Number of units sold
Sales Revenue / Turnover
Selling price per unit ร Number of units sold
Market capitalisation of a business
Number of issued shares ร Current share price
Market size volume
The quantity of goods and services produced in a particular market over a period of time usually one year
Market size (value)
The total sales revenue generated from selling all of the goods and services produced in a particular market over a period of time (usually one year)
Sales volume
The quantity of goods and services produced by a particular business over a period of time (usually one year).
Sales value
The total sales revenue of a particular business over a period of time usually (one year).
Market growth (%) in year X
Change in the size of the market between year (X-1) and year X รท Size of the market in year (X-1)
Sales growth (%) in year X
Change in sales of product or business between year (X-1) and year X รท Sales of product or business in year (X-1)
Market share (%)
Sales of one product OR brand OR business รท Total sales in the market
Price elasticity of demand
Percentage change in quantity demanded รท Percentage change in price
Added Value
Sales revenue - costs of bought in goods and services
Labour productivity
Output per time period รท Number of employees
Unit cost
Total costs of production รท Number of units of output produced
Capacity utilization
Actual output in a given time period รท Maximum possible output in a given time period
Return on investment (%)
Return on investment (ยฃ) รท Cost of the investment (ยฃ)
Gross Profit
Sales Revenue - Cost of Sales
Profit from Operations, or Operating profit
Sales Revenue - Cost of Sales - Operating Expenses
Profit for the year
Operating profit + Profit from other activities - Net finance costs -Tax
Variance
The difference between an actual and a budgeted figure.
Contribution per unit
Selling price - Variable costs per unit
Total contribution
Contribution per unit ร Units produced or sold OR Total revenue - Total variable costs
Break even output
Fixed costs รท Contribution per unit
Margin of safety
Actual level of output - Breakeven level of output
Gross profit margin (%)
Gross profit รท Sales revenue
Operating profit margin (%)
Operating profit รท Sales revenue
Profit for the year margin (%)
Profit for year รท Sales revenue
Labour turnover (%)
Number of staff leaving during the year รท Average number of staff employed by the business during the year
Employee retention rate (%) for a particular time period
Number of staff leaving during the year รท Average number of staff employed by the business during the year
Labour cost per unit
Labour costs รท Units of output
Return on capital employed (ROCE) (%)
Operating profit Total equity + non-current liabilities
Capital employed
total equity + non-current liabilities
Current ratio
Current assets รท Current liabilities
Gearing (%)
Non-current liabilities รท (Total equity + non-current liabilities)
Payable days
(Payables รท Cost of sales) x 365
Receivable days
(Receivables รท Sales revenue) x 365
Inventory turnover
Cost of goods sold รท Average inventories held
Average rate of return %
Net return from project (ยฃ) or number of years รท Initial cost of project (ยฃ)
Payables
Creditors
Receivables
Debtors
Note 
Flashcards (44)