BUSINESS EQUATIONS

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20 Terms

1
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profit
revenue - costs
2
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revenue
price x quantity
3
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total costs
fixed costs + total variable costs
4
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average fixed costs
total fixed costs / quantity
5
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total variable costs
variable cost per unit x units sold
6
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average unit costs
total costs / output
7
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market share
sales of business / total sales in market x 100
8
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market growth
changes in sales / original sales x 100
9
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break-even output
fixed costs / (price - variable cost per unit)
10
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margin of safety
actual sales - break-even output
11
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net cash flow
total inflows - total outflows
12
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opening balance
closing balance of previous period
13
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closing balance
opening balance + net cash flow
14
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gross profit
revenue - cost of sales
15
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gross profit margin
gross profit / revenue x 100
16
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net profit
gross profit - expenses
17
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net profit margin
net profit / revenue x 100
18
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percentage change
new - original / original x 100
19
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changes in %
new% - old%
20
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ARR
average annual profit / cost of investment x 100