Business formulas

Return on investment

Profit from the investment

Cost of the investment *100

Gross profit

Total revenue-costs of goods

Operating profit

Total revenue-costs of running business

Gross profit-operating expenses

Profit for the year

Total revenue-total expense

Budget variance

Actual costs-budgeted costs

Sales revenue

Numbers of units *price

total costs

Fixed costs+variable costs

Net cash flow

Cash inflows-cash outflows

Closing balance

Operating balance -net cash flow

Break even

Fixed costs

Selling price- variable costs

Per unit Per Unit

Margin of safety

Actual sales -break even sales

Contribution per unit

Selling price per unit -variable costs per unit

Total contribution

Total sales -total variable costs

Contribution per unit*units sold

Gross profit margin

(Gross profit)

(Total revenue) *100

Operating Profit margin

(Operating profit)

(Total revenue) *100

Profit

Revenue-total costs

Total contribution- fixed costs

Margin of safety * contribution per unit

Labour productivity

Total output

Total labour input

Unit costs

Total costs

Total outputs

Capacity

Total available output

Time period

Capacity utilisation

(Actual output)

(Maximum possible output) *100

Market capitalization

Number of issues *current share price

Expected value of a decision with two possible outcomes

(Pay-off of A*probability of A)+(pay-off of B*probability of B)

Net gain

Expected value- initial cost of decision

Market growth

Change int the size of the market over a period

Original size of the market *100

Market share

Sales of one product

Total sales in the market. *100

Added value

Sales revenue- costs of bought in goods and services

Variable costs

Variable costs per unit* number of units sold

Return on investment

Net profit

Cost. *100