business formulas

Total Revenue (TR)

Price × Quantity

Total Cost (TC)

Fixed Costs + (Variable Cost × Quantity)

Profitability

Profit

TR – TC

Gross Profit

Revenue – Cost of Sales

Final Accounts

Profit Before Interest and Tax (PBIT)

Gross Profit – Expenses

Profit Before Tax (PBT)

PBIT – Interest

Profit for the Period

PBT – Tax

Retained Profit

Profit for the Period – Dividends

Statement of Financial Position

Net Assets

Total Assets – Total Liabilities

Equity

Share Capital + Retained Earnings

Straight-line Depreciation

(Cost – Residual Value) ÷ Years

Contribution per Unit

Selling Price – Variable Cost

Break-even Output

Fixed Costs ÷ Contribution per Unit

Units of production depreciation

(Cost - Residual Value) ÷ Units Produced / KM travelled etc.

Cumulative Cash Flow

Current Year's Net Cash Flow + Previous Year's Cumulative Cash Flow

Shortfall

Initial Investment − Cumulative Cash Flow Before Payback

Average Monthly Cash Flow

Annual Net Cash Flow ÷ 12

Months Required

Shortfall ÷ Average Monthly Cash Flow

Payback Period

Years Before Payback + Months Required

Net Cash Flow

Cash Inflows − Cash Outflows

Present Value

Net Cash Flow × Discount Factor

Net Present Value (NPV)

Total Present Value of Cash Flows − Initial Investment