Year 1 equations

What is the equation for ‘market share’?

(Sales of a product or business / Total market sales) x 100

What is the equation for ‘Price elasticity of demand’?

% change in quantity demanded / % change in price

What is the equation for ‘Income elasticity of demand’?

% change in quantity demanded / % change in income

What is the equation for ‘Net cash flow’?

Total inflows - total outflows

What is the equation for ‘Sales volume’

Total number of units sold over a period of time

What is the equation for ‘Sales revenue’?

Number of units sold x unit price

What is the equation for ‘Total variable costs’

Number of units sold x variable cost per unit

What is the equation for ‘Total costs’?

Fixed costs + variable costs

What is the equation for ‘Contribution per unit’?

Selling price per unit - variable cost per unit

What is the equation for ‘Total contribution’

Contribution per unit x number of units sold

What is the equation for ‘Break-even’?

Fixed costs / Contribution per unit

What is the equation for ‘Variance’?

Actual - Budget

What is the equation for ‘Gross profit’?

Sales revenue - cost of sales

What is the equation for ‘Operating profit’?

Gross profit - overheads

What is the equation for ‘Net profit’

Operating Profit +/- finance costs

What is the equation for ‘Gross profit margin’?

(Gross profit / Sales Revenue) x 100

What is the equation for ‘Operating profit margin’?

Operating profit/sales revenues x 100

What is the equation for ‘Profit for the year (net profit) margin’?

Profit for the year/sales revenue x 100

What is the equation for ‘Current ratio’?

Currents assets/current liabilities

What is the equation for ‘Acid test ratio’?

(Current assets - stock) / current liabilities

What is the equation for ‘Productivity (labour)’?

Output per period (units) / Number of employees

What is the equation for ‘Capacity utilisation’?

(Actual level of output/Maximum possible output) x100