finance btec equations

Variable cost

Variable cost per unit x quantity

Total costs

Fixed costs + variable costs + semi-variable costs

Total revenue

Quantity of goods sold x selling price per unit

Contribution per unit

Selling price - variable costs per unit

Break even point

Fixed costs / contribution per unit

Margin of safety

Sales - break even level of output

Months to break even

Break even units / units produced

Per month

Net current assets

Current assets + fixed assets - current liabilities

Annual depreciation

(Assets purchased - estimated salvage value) / estimated useful life

Gross profit margin

Gross profit / revenue x 100

Mark up

Gross profit / cost of sales x 100

Net Profit margin

Net profit / revenue x 100

ROCE

Net profit before interest and tax / capital employed x 100

Current ratio formula

Current assets / current liabilities

Liquid capital ratio formula

(Current assets - inventory) / current liabilities

Trade receivable days

(Trade receivables / credit sales) x 365

Trade payable days

(Trade payables / credit purchases) x 365

Inventory turnover

(Average inventory / cost of sales) x 365