IGCSE Business Formula Sheet

A comprehensive collection of business formulas and accounting ratios based on the IGCSE Business curriculum, including productivity, profitability, liquidity, and cash flow calculations.

Labor Productivity

$$\frac{\text{Output}}{\text{Number of employees}}$$

Revenue

$$\text{Quantity sold} \times \text{Price}$$

Profit

$$\text{Total Revenue} - \text{Total Costs}$$

Total Costs

$\text{Fixed Costs} + \text{Variable Costs}$ (where Variable Costs are $\text{VC per unit} \times \text{qty sold}$)

Average Cost

$$\frac{\text{Total Costs}}{\text{Total Number of units produced}}$$

Break even point

$$\frac{\text{Fixed costs}}{\text{Sell price} - \text{variable cost per unit}}$$

Margin of safety

$$\text{Maximum possible output/current sales} - \text{Break even output}$$

Gross profit

$$\text{Revenue} - \text{Cost of sales}$$

Gross profit margin

$$\frac{\text{Gross profit}}{\text{Revenue}} \times 100$$

Profit (measured from Gross Profit)

$$\text{Gross profit} - \text{Expenses}$$

Profit margin

$$\frac{\text{Profit}}{\text{Revenue}} \times 100$$

Return on Capital Employed (ROCE)

$$\frac{\text{Profit}}{\text{capital employed}} \times 100$$

Capital Employed

$$\text{Total Equity} + \text{Non-current liabilities}$$

Working Capital

$$\text{Current Assets} - \text{Current Liabilities}$$

Total Equity

$$\text{Total assets} - \text{total liabilities}$$

Current ratio

$\frac{\text{Current Assets}}{\text{Current liabilities}}$; a value of $1.5$ or above is considered good.

Acid Test Ratio (or Quick Ratio)

$\frac{\text{Current Assets} - \text{Inventory (or Stock)}}{\text{Current Liabilities}}$; a value above $1$ is considered good.

Market share (of one business)

$$\frac{\text{Total Sales of the one business}}{\text{total sales of ALL businesses in the market}} \times 100$$

Cost-plus pricing

$\text{Cost per unit} + \text{markup } \%$; for example, a $10 t-shirt with a 50% mark-up results in a price of $15$ ($10 + 50\%$).

Opening balance

The previous month’s closing balance.

Net cash flow

$$\text{total monthly inflow} - \text{total monthly outflow}$$

Closing balance

$$\text{opening balance} + \text{net cash flow}$$