Case Prep

REVENUE

Quantity x Price

TOTAL VARIABLE COSTS

Quantity x Variable Costs

COSTS

Total Variable Costs + Fixed Costs

PROFIT (general)

Revenue - Costs

PROFIT (specific)

(Price-Variable Cost) x Quantity - Fixed Costs

CONTRIBUTION MARGIN

Price - Variable Cost

Profit Margin

Profit/Revenue

RETURN ON INVESTMENT (ROI)

Profit/Investment Cost

PAYBACK PERIOD

Investment Cost/Profit per Year

OUTPUT

Rate x Time

Utilization

Output/Maximum Output

Market Share

Company Revenue in the Market/Total Market Revenue

Relative Market Share

Company Market Share/Largest Competitor's Market Share

Gross Profit

Sales - COGS

Operating Profit

Gross Profit - Operating Expenses - Depreciation - Amortization

Gross Profit Margin

Gross Profit/Revenue

Operating Profit Margin

Operating Profit/Revenue

EBITDA

Operating Profit + Depreciation + Amortization

Compounded Annual Growth Rate (CAGR)

(Ending Value/Beginning Value)^(1/Time Period)-1

Rule of 72

72/Annual Growth Rate = Doubling Time

NPV

Cash Flow/((1+Discount Rate)^(time period))

Perpetuity Formula

Present Value = Cash Flow/Discount Rate

Return on Equity (ROE)

Profit/Shareholder Equity

Return on Assets (ROA)

Profit/Total Assets

Price Elasticity of Demand

% change in quantity/% change in price

Cross Elasticity of Demand

% change in good 1/% change in good 2