AQA A Level Business Key Formulas and Data

These flashcards cover key formulas and definitions related to AQA A Level Business, including profit calculations, market analysis, operational metrics, and investment evaluations.

Total Costs

Total costs = Fixed costs + Variable costs.

current ratio

current assets : current liabilites

revenue

selling price x number of units sold

Profit Formula

Profit = Total revenue - Total costs OR Total contribution - Fixed costs.

Total Variable Costs

Total variable costs = Variable cost per unit × Number of units sold.

Sales Revenue (Turnover)

Sales revenue or Turnover = Selling price per unit × Number of units sold.

Market Capitalisation

Market capitalisation of a business = Number of issued shares × Current share price.

Expected Value Formula

Expected value of a decision with two possible outcomes A & B = (Pay-off of A × probability of A) + (Pay-off of B × probability of B).

recieveable days

recieveables/cost of sales x 365

payables

payables / cost of salesx 365

inventory turnover

cost of sales / average inventory held

Net Gain

Net gain = Expected value - Initial cost of decision.

market growth

change in market size / original market size x 100

market share

sale of one product / total sales in the market x100

Added Value

Added value (value added) = Sales revenue - costs of bought-in goods and services.

gearing

non current liabilities / total equity + non current ;liability x100

current ratio

Current ratio = Current assets / Current liabilities

Change in Market Size Formula

Change in the size of the market between year (X-1) and year X = Size of the market in year (X-1) - Sales of one product OR brand OR business.

Sales Growth Percentage Formula

Sales growth % in year’X’ = Change in sales of product or business between year (X-1) and year X / Sales of product or business in year (X-1) × 100.

unit cost

total cost / number of units of output

Labour Productivity

Labour productivity = Output per time period / Number of employees.

Return on Investment (ROI)

return on investment / cost of investment x100

Gross Profit Formula

Gross Profit = Sales Revenue - Cost of Sales.

Operating Profit Formula

Profit from Operations = Operating profit = Sales Revenue - Cost of Sales - Operating Expenses.

Variance

budgeted figure - actual figure

Contribution Per Unit Formula

Contribution per unit = Selling price - Variable costs per unit.

Break-even Output

fixed cost / contribution per unit

Margin of Safety Formula

Margin of safety = Actual level of output - Breakeven level of output.

Labour Turnover Percentage Formula

Labour turnover (%) = Number of staff leaving during the year / Average number of staff employed by the business during the year × 100.

Unit Costs Definition

Unit costs (average costs) = Total costs of production / Number of units of output produced.

average rate of return

average annual return/ initial cost of project x 100

profit for the year

operating profit + profit from other activities - net finanical cost- tax

gross profit margin

gross profit / revenue x100

operating profit margin

operating profit / revenue x 100

profit of the year margin

profit for the year / revenue x 100

total contribution

contribution per unit x units sold or total revenue - total variable costs

Capacity Utilization Formula

Capacity utilization (%) = Actual output in a given time period / Maximum possible output in a given time period × 100.